TW Telecom Feels The Disconnect (TWTC)

TW Telecom Inc. (NASDAQ: TWTC), the former Time Warner Telecom, is having a rough morning.  Last night the company submitted an SEC filing showing that it was going to warn of slower revenue trends at an investor conference.  The company said that it is still experiencing revenue pressure from disconnects from homeowners behind in their mortgages and from very small customers.  The weakness in the Midwest is seeing a potential extension of the slowing economy in the Southeast and in individual markets in other regions.  To add fuel to the fire, it is warning that it may experience a small business customer churn increase as it disconnects non-paying customers.

So far we are seeing two downgrades in the stock.  Citigroup has takenits buy rating to a hold and Merriman Curhan Ford has cutits buy rating to neutral.  Soleil has recently upgraded this stock, and both JPMorgan and Oppenheimer had cut their ratings last month.

This telecom provider is going to be opening on new 52-week lows as theprior range was $13.61 to $24.00.  Shares are down 22% at $11.50 inearly pre-market trading. In regular trading it was down about 18 percent.

Before this drop its market cap was listed as still being almost $2.2 billion.  Analysts were previously looking for $1.17 billion in 2008revenues and $1.27 billion next year.  Those numbers are going to belower as of today’s data.

Jon C. Ogg
September 9, 2008