Time Warner Earnings: Here’s Why Investors are Buying Shares Now

Time Warner Inc. (NYSE:TWX) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 3.93%.

Time Warner Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 40.68% to $0.83 in the quarter versus EPS of $0.59 in the year-earlier quarter.

Revenue: Rose 10.25% to $7.44 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Time Warner Inc. reported adjusted EPS income of $0.83 per share. By that measure, the company beat the mean analyst estimate of $0.76. It beat the average revenue estimate of $7.11 billion.

Quoting Management: Chairman and Chief Executive Officer Jeff Bewkes said: “We had a very strong quarter and first half financially and operationally, putting us on track for another great year. During the second quarter, we grew revenues by 10%, Adjusted Operating Income by 25%, and Adjusted EPS by nearly 50%. Our Networks businesses, Turner and HBO, continued to shine, reflecting the success of our increased investments in distinctive programming that is resonating with audiences, advertisers and affiliates. For example, TNT and TBS finished the second quarter as the #1 and #3 ad-supported cable networks in primetime for adults 18-49 on the strength of original dramas like Falling Skies, Major Crimes and Dallas, comedies like The Big Bang Theory and Cougar Town and another very strong showing for the NBA Playoffs. CNN also grew ratings by almost 70% in its key demo, taking share from competing news networks. HBO continues to benefit from the strongest programming lineup in its history, including Game of Thrones, which finished its third season up more than 20% in viewers, and the made-for-HBO film Behind the Candelabra – the most watched HBO film in a decade. Underscoring that strength, HBO recently received 108 Primetime Emmy nominations, the most of any network for the thirteenth year in a row and more than double the closest competitor. At Warner Bros., we had a fantastic quarter, including one of its most successful upfront seasons ever, with orders for 31 new and returning shows from the broadcast networks. And we had a strong theatrical quarter with our blockbuster reboot of the Superman franchise, Man of Steel, and The Great Gatsby. Reflecting our confidence in our outlook and our commitment to stockholder returns, so far this year we’ve repurchased $1.8 billion of our stock and paid out over $500 million in dividends.”

Key Stats (on next page)…

Revenue increased 7.15% from $6.94 billion in the previous quarter. EPS increased 9.21% from $0.76 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.95 to a profit $0.94. For the current year, the average estimate has moved down from a profit of $3.69 to a profit of $3.68 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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