Time Warner Inc. Earnings Cheat Sheet: Revenue Growth Drives Margin, Profit Increases

S&P 500 (NYSE:SPY) component Time Warner Inc. (NYSE:TWX) reported net income above Wall Street’s expectations for the third quarter. Time Warner is a media and entertainment company.

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Time Warner Earnings Cheat Sheet for the Third Quarter

Results: Net income for the entertainment company rose to $822 million (78 cents per share) vs. $522 million (46 cents per share) in the same quarter a year earlier. This marks a rise of 57.5% from the year earlier quarter.

Revenue: Rose 10.8% to $7.07 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: TWX reported adjusted net income of 79 cents per share. By that measure, the company beat the mean estimate of 75 cents per share. Analysts were expecting revenue of $6.97 billion.

Quoting Management: Chairman and Chief Executive Officer Jeff Bewkes said: “This was another terrific quarter for us, financially and strategically, putting us on pace to exceed our prior financial goals for the year. Our results demonstrate the success of Time Warner’s focus on investing in great content that audiences love and leading the evolution of how it’s delivered. Warner Bros. had a record-setting quarter, led by Harry Potter and the Deathly Hallows: Part two, which grossed $1.3 billion at the box office globally, ranking as the 3rd highest grossing film ever and capping an unprecedented franchise run. Warner Bros. also has had an excellent start in the new TV season with returning series such as The Big Bang Theory, Mike & Molly and Two and a Half Men, and new shows including two Broke Girls, Suburgatory and Person of Interest. We’re also pleased with the early success of The Big Bang Theory on TBS, illustrating how our content can create value across the company.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 4 cents in the second quarter, by one cent in the first quarter, and by 5 cents in the fourth quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 10.2% to $7.03 billion in the second quarter. The figure rose 5.7% in the first quarter from the year earlier and climbed 59.6% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income rise in two straight quarters. In the second quarter, net income rose 13.5% from the year earlier.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the fourth quarter has risen to 86 cents per share from 85 cents. Over the past three months, the average estimate for the fiscal year has climbed from $2.76 per to share to $2.78.

Competitors to Watch: News Corporation (NASDAQ:NWSA), The Walt Disney Company (NYSE:DIS), CBS Corporation (NYSE:CBS), Comcast Corporation (NASDAQ:CMCSA), Time Warner Cable Inc. (NYSE:TWC), Sony Corporation (NYSE:SNE), Liberty Global Inc. (NASDAQ:LBTYA), Gannett Co., Inc. (NYSE:GCI), Yahoo! (NASDAQ:YHOO), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG), InterActive Corp (NASDAQ:IACI), Netflix (NASDAQ:NFLX), TiVo (NASDAQ:TIVO) and Liberty Media Corp (NASDAQ:LSTZA).

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(Source: Xignite Financials)