Time Warner Earnings Around the Corner

S&P 500 (NYSE:SPY) component Time Warner (NYSE:TWX) will unveil its latest earnings tomorrow, Wednesday, August 1, 2012. Time Warner is a media and entertainment company.

Time Warner Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 58 cents per share, a decline of 3.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 68 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 60 cents during the last month. Analysts are projecting profit to rise by 11.1% versus last year to $3.21.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 3 cents, reporting net income of 67 cents per share against a mean estimate of profit of 64 cents per share.

Investing Insights: Is TV the Next Bullish Catalyst for Apple’s Stock?

Stock Price Performance: Between May 30, 2012 and July 30, 2012, the stock price had risen $3.31 (9.38%), from $35.27 to $38.58. The stock price saw one of its best stretches over the last year between December 19, 2011 and December 27, 2011, when shares rose for six straight days, increasing 7.3% (+$2.44) over that span. It saw one of its worst periods between July 27, 2011 and August 8, 2011 when shares fell for nine straight days, dropping 17.5% (-$6.36) over that span.

A Look Back: In the first quarter, profit fell 10.7% to $583 million (59 cents a share) from $653 million (59 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 4.4% to $6.98 billion from $6.68 billion.

Analyst Ratings: There are 16 out of 25 analysts surveyed (64%) rating Time Warner a buy.

Key Stats:

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 13.5% in the second quarter of the last fiscal year, 57.5% in the third quarter of the last fiscal year and 0.5% in the fourth quarter of the last fiscal year before declining in the first quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 10.2% in the second quarter of the last fiscal year, 10.8% in the third quarter of the last fiscal year and 4.9% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Wall St. Revenue Expectations: On average, analysts predict $6.95 billion in revenue this quarter, a decline of 1.1% from the year-ago quarter. Analysts are forecasting total revenue of $29.39 billion for the year, a rise of 1.4% from last year’s revenue of $28.97 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.34 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. The company regressed in this liquidity measure from 1.51 in the fourth quarter of the last fiscal year to the last quarter driven in part by a decrease in current assets. Current assets decreased 8.5% to $12.29 billion while liabilities rose by 2.5% to $9.15 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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