We have recently initiated coverage on Time Warner Inc. (TWX) with a Neutral rating. The company is a global leader in media and entertainment with cable systems, television networks, filmed entertainment and publishing businesses.
With the spin-off of AOL, Inc. (AOL) and Time Warner Cable Inc. (TWC), Time Warner can now concentrate more on filmed entertainment content and cable television network distribution business that have the potential to deliver growth.
Moreover, the company also has a limited exposure to traditional advertising media, the broadcast, radio and print, which have long been under secular pressure with advertisers migrating to the Internet due to increasing online readership. Time Warner derives 14% of its total revenue from the Publishing segment.
Time Warner’s significant international presence has also helped broaden its client base and product portfolio. Time Warner operates in the United Kingdom, Germany, Canada, France, Japan and other countries apart from the United States.
The company has reported better-than-expected results in the most recent quarter. The fourth-quarter 2009 earnings of 55 cents a share surpassed the Zacks Consensus Estimate of 52 cents. In the prior-year quarter, the company had reported earnings of 19 cents.
Total revenue in the quarter rose 2.2% to $7,320 million, driven by growth across the Networks and Filmed Entertainment segments, partially offset by a decline in the Publishing segment.
The improved scenario has resulted in the company expecting fiscal 2010 earnings to rise in the mid-teens in percentage terms. The improved results have encouraged management to raise its quarterly dividend by 13.3% to 21.25 cents a share and increase the share repurchase authorization to $3 billion.
Read the full analyst report on “TWX”
Read the full analyst report on “AOL”
Read the full analyst report on “TWC”
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