Time Warner Inc (TWX): Earnings Expectations Drop As Investors Focus On Publishing


Time_Warner_Center_May_2010

Time Warner Center NYC (Wikipedia)

Time Warner Inc (NYSE:TWX) will be releasing its December quarterly numbers on Wednesday morning. While analysts have different opinions and rate the shares based on their own analysis, the consensus among them is a reduction in earnings expectations from the company. This might indicate what is going to be in store for investors, as well as analysts.

The reduction could suggest that Time Warner Inc (NYSE:TWX) will not be gaining much from the success of its film, ‘Sniper’. The film remained as the number one movie for three weeks at the box office. Yet the film was not released extensively until the middle of January.

Other Movies

Therefore, the company would have to count on other movies that hit big in the December quarter period. For instance, ‘The Hobbit: The Battle of the Five Armies” grossed close to $1 billion around the world. This might not have been enough to report year-over-year growth in revenue since the preceding year had more hits in the league of $700 million worldwide gross.

Warner Brothers performance was crucial for Time Warner Inc (NYSE:TWX) because approximately 45% of its total revenue came from the segment in the third quarter. Therefore, investors and analysts’ would be looking at other segments like its television networks, cable TV properties and publishing to offset the likely weakness witnessed in the movie section.

Earnings Expectations

At the start of the fourth quarter, analysts’ consensus was $1.04 a share. This was later trimmed to $1.01 a share two months back and remained at the same level one month ago. However, before the last week, analysts’ average estimation was drastically reduced to 94 cents a share from $1.01.

Currently, Street is predicting $7.55 billion in revenue generation from Time Warner Inc (NYSE:TWX). Analysts’ latest estimation indicates an earnings drop of 12.5% dragged down by revenue’s 11.9% downtick. In the 2013-fourth quarter, the company earned $1.07 a share and $8.56 billion revenue. The company’s EPS surpassed expectations in the last three of the four quarters.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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