TW Telecom shares soar after analyst upgrade

JPMorgan analyst Mike McCormack raised his rating on TW Telecom, a provider of phone and Internet services to businesses, to "Neutral" from "Underweight."

McCormack noted the stock is down 55 percent since July and further declines will be "significantly more limited" from these levels even if the economy continues to deteriorate.

On Wednesday, Littleton, Colo.-based TW Telecom reported a net income of $3.8 million, or 3 cents per share, for the third quarter compared with a loss of $11.6 million, or 8 cents per share, in the year-ago period.

Revenue rose 6 percent to $291.6 million from $274.8 million.

On average, analysts polled by Thomson Reuters expected income of 4 cents per share on revenue of $292.5 million.

McCormack said quarterly earnings before interest, taxes, depreciation and amortization of $102.6 million were higher than his forecast, despite slower revenue growth. Cost cutting resulted in an improvement in margins to 35.2 percent, their highest level since mid 2006.

Shares of TW Telecom rose 65 cents, or 9.7 percent, to close at $7.33. The stock has ranged from $4.39 to $23.92 over the past year.