Tele-Communications Inc. won’t be as badly harmed as many imagined from the new cable rate regulations, the company said.
The giant cable operator’s treasurer Bernard W. Schotters told Wall Street analysts at a meeting Monday that TCI’s revenues will likely be sliced by 4%, while cash flow would drop by 8%.
The announcement sent the company’s shares up 1 5/8, or 7.2%, to $ 24.125, on 7.4 million shares, three times normal volume.
More significantly, Schotters is reported to have said that a quarter of the company’s franchises already meet federally mandated pricing guidelines. “According to their comments, the impact of rate rollbacks came out at the more positive end of expectations,” Smith Barney, Harris Upham & Co. analyst John Reidy says, adding that other cable companies don’t have the same good news. “Continental is taking a 5% to 6% hit to revenues and easily a 10% or greater cut to cash flow,” he says.