Time Warner Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for profit of 82 cents per share, a rise of 3.8% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 87 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 83 cents during the last month. For the year, analysts are projecting net income of $3.21 per share, a rise of 11.1% from last year.
Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by one cent, reporting profit of 59 cents per share against a mean estimate of net income of 58 cents per share.
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A Look Back: In the second quarter, profit fell 32.6% to $430 million (44 cents a share) from $638 million (59 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 4.1% to $6.74 billion from $7.03 billion.
Stock Price Performance: Between October 4, 2012 and November 1, 2012, the stock price dropped $2.03 (-4.4%), from $45.83 to $43.80. The stock price saw one of its best stretches over the last year between July 30, 2012 and August 10, 2012, when shares rose for 10 straight days, increasing 11.2% (+$4.32) over that span. It saw one of its worst periods between May 10, 2012 and May 18, 2012 when shares fell for seven straight days, dropping 4.5% (-$1.60) over that span.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.52 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.
On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 10.8% in the third quarter of the last fiscal year, 4.9% in the fourth quarter of the last fiscal year and 4.4%in the first quarter before dropping in the second quarter.
An income boost this time around would be welcome news after profit declines in the past two quarters. Net income dropped 10.7% in the first quarter and then again in the second quarter.
Wall St. Revenue Expectations: Analysts are projecting a decline of 2.4% in revenue from the year-earlier quarter to $6.9 billion.
Analyst Ratings: There are 16 out of 26 analysts surveyed (61.5%) rating Time Warner a buy.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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