Earnings Preview: Time Warner

| About: Time Warner (TWX)

Time Warner (NYSE:TWX) is expected to report Q3 earnings before the market open on Wednesday, November 3 with a conference call scheduled for 10:30 am ET.


Analysts are looking for a profit of 53c on revenue of $6.41B. The consensus range is 50c-55c for EPS, and revenue of $6.12B-$6.63B, according to First Call. In August, Time Warner forecast FY10 EPS "at least" 20% above FY09 EPS of $1.83 vs. First Call consensus $2.26. During the quarter, Time Warner announced leadership changes at Warner Bros, CNN and Time Inc., and said that the merger with AOL (NYSE:AOL) was the "biggest mistake in corporate history." CEO Jeff Bewkes also said he doesn't think Internet programing on TV's is a threat and instead will work with Google (NASDAQ:GOOG) on its Google TV initiative. In addition, Bewkes suggested that participating in Apple's (NASDAQ:AAPL) TV show rental plan could jeopardize his company's business model when it comes to TV shows, according to The Hollywood Reporter. During the quarter, Time Warner was rumored to buy Chilevision, Shed Media and had been a contender to buy Metro-Goldwyn-Mayer. Reuters recently reported that many big media stocks are up 20%-40% over the past year, but considers that the recovery in advertising could stall out.

Analyst Views

According to analysts at Collins Stewart, Time Warner should post revenue growth of 2.7% to reach $6.43B, largely driven by advertising pricing gains. The firm expects Time Warner will benefit in Q4 from improving ratings comparisons at the Turner networks, as well as a boost in the film division from the latest "Harry Potter" film.