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Time Warner Cable, Netflix Pen Interconnection Agreement

Zacks Equity Research

Time Warner Cable Inc. (TWC) has reportedly reached a paid interconnection deal with Netflix, Inc. (NFLX). The deal was reportedly agreed upon in June while the interconnection between the networks began in August.

Per the deal, Time Warner Cable will deliver Netflix’s content directly to its customers without compromising on the video quality. However, financial details of the deal were not disclosed by the two companies.

With the deal in place, Time Warner Cable customers streaming Netflix content will get high speed service without frequent buffering. Moreover, the paid connections with Netflix will be available across all of Time Warner Cable’s markets.

In the recently concluded quarter, the company reported weak financial results for the second quarter of 2014, with both the top and the bottom line lagging the respective Zacks Consensus Estimate. However, the company’s earnings increased 11.8% year-over-year to $1.89. Per the Netflix deal, Time Warner Cable should receive payment for data transfer which will likely boost its earnings in the coming quarters.

In June, Time Warner Cable and global WiFi service provider Boingo Wireless, Inc. had jointly announced a roaming access agreement. Per the pact, Time Warner Cable customers will be able to access Boingo’s WiFi services in over 100 superior Boingo locations.

Time Warner Cable currently bears a Zacks Rank #3 (Hold).

Other Stocks to Consider

Better-ranked stocks worth considering in the Cable TV industry are Cablevision Systems Corp. (CVC) and Comcast Corp. (CMCSK). Cablevision Systems holds a Zacks Rank #1 (Strong Buy), whereas Comcast Corporation carries a Zacks Rank #2 (Buy).

Read the Full Research Report on NFLX
Read the Full Research Report on CVC
Read the Full Research Report on TWC
Read the Full Research Report on CMCSK

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