Dycom sees revenue opportunity in Charter-TWC merger

Charter van

Charter’s acquisition of Time Warner Cable, and the latter’s subsequent digital conversion, presents a business opportunity for telecom services supplier Dycom, the vendor told its investors. 

“Charter has been pretty open that their first priority going into the calendar year is to take the Time Warner systems all digital,” said Steven Nelson, Dycom’s president and CEO, speaking to investors during Tuesday’s second-quarter earnings call. 

“That requires the deployment of customer premise equipment that we do for Charter and did do for Time Warner,” he added. “So we think there are some opportunities there. There are also some buildout requirements that Charter committed to with the FCC in terms of deploying plant to new customer locations over a four- or five-year term. We think that's an opportunity. And we do think that just there is a general opportunity, as we are seeing with Comcast, on fresh deployments of fiber to small and medium enterprise and even some larger customers, particularly as Charter's footprint is very substantial post the closing of the merger.”

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Charter is Dycom’s sixth largest customer, generating 4.8 percent of the company’s revenue. Dycom said it recently extended its construction and maintenance service agreements with Charter in Texas, Missouri, Illinois, Kentucky, Tennessee and Alabama. 

For the second quarter, Dycom beat analysts’ consensus forecast. The specialty contracting services provider reported adjusted earnings per share of $1.64 in Q2, surpassing estimates of $1.56 by 5.1 percent.

During Charter’s second quarter earnings call earlier this month, President and CEO Thomas Rutledge said Charter will embark on a rebrand campaign for both TWC and Bright House in the fall, with TWC subscribers in big cities getting Charter’s two-way Spectrum Guide video product beginning in the middle of next year. The rollout of Spectrum Guide will be completed across Charter’s legacy footprint by the end of this year and across the entire footprint by 2018. 

For more:
- read this Seeking Alpha transcript

Related articles:
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Charter opens ‘black box’ of Bright House Networks in Q2

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