Q3 Preview: Time Warner (TWX) Hopes Ad Revs Can Offset Heavier 'Originals' Spending (NWSA, VIA, DIS)
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Time Warner Inc. (NYSE: TWX) is trading higher ahead of the company's third quarter earnings report, expected out before the market opens tomorrow. Shares are up 0.93% in afternoon trading today.
TWX is expected to report an EPS of $0.53 on revs of $6.41 billion. For Q209, the company had an EPS of $0. with revs of $ .
The stock gained 8.3% through the quarter to $30.65 at the end of September. Shares are up 6.4% since then, and 13% higher on the year.
A simple valuation puts TWX with a forward P/E of 12.7x FY11 EPS estimates, compared to 11.6x for News Corp. (Nasdaq: NWSA), 13.5x at Viacom (NYSE: VIA), and 15.1x for Disney (NYSE: DIS). Time Warner also carries a $0.2125 quarterly dividend, which currently yields 2.6%.
Data from Bloomberg has 19 analysts with a Buy rating, 12 with a Hold, and none suggesting to Sell. The analyst price target average is $38, with a high of $42 and low of $34.
Analyst Ratings Through the Quarter
Summary
Deutsche Bank is expecting 5% revs growth to $6.566 billion attributed to though movie comps and heavy spending on originals for HBO and Turner. Additionally, DB "estimates Film EBITDA -25% PF to $300 million, Cable Nets EBITDA +6.3% to $1.137b and Print +14% PF to $172m. [They] reduced EBITDA by a $50 million intercompany elimination for TV product sold to Turner. EPS remains $0.53, down only 1% Y/Y due to repurchase accretion." Deutsche has a Buy rating and $40 price target on the shares.
Goldman is looking for Q310 revs of $6.517 billion and an EPS of $0.53. They see a 9% increase in Networks revenue, to $2.99 billion, with a 6% increase in operating income, to $1.031 billion. Filmed Entertainment should see income of $214 million, off 31% from 2009, the reflection of higher syndication revs and weaker theatrical performance. Publishing is expected to have a 5% bump in ads, though they believe that their estimates may be a little aggressive following management commentary. Goldman has a Neutral rating on the shares, with a price target of $39 over the next 12-months. They note "Time Warner is one of the more defensive stocks in the media sector given that only 20% of its revenue is generated from advertising."
In late October, UBS said that they expect strong results from cable operators in Q3/Q410 "given the solid demand and general lack of inventory available, which is driving up CPMs into the teens vs. the upfront, though as high as the 30%+ range for certain dayparts on sought after networks."
Time Warner Inc. is expected to release their Q310 earnings on Wednesday, November 3, 2010, at approximately 7:00am EDT. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
TWX is expected to report an EPS of $0.53 on revs of $6.41 billion. For Q209, the company had an EPS of $0. with revs of $ .
The stock gained 8.3% through the quarter to $30.65 at the end of September. Shares are up 6.4% since then, and 13% higher on the year.
A simple valuation puts TWX with a forward P/E of 12.7x FY11 EPS estimates, compared to 11.6x for News Corp. (Nasdaq: NWSA), 13.5x at Viacom (NYSE: VIA), and 15.1x for Disney (NYSE: DIS). Time Warner also carries a $0.2125 quarterly dividend, which currently yields 2.6%.
Data from Bloomberg has 19 analysts with a Buy rating, 12 with a Hold, and none suggesting to Sell. The analyst price target average is $38, with a high of $42 and low of $34.
Analyst Ratings Through the Quarter
Summary
Deutsche Bank is expecting 5% revs growth to $6.566 billion attributed to though movie comps and heavy spending on originals for HBO and Turner. Additionally, DB "estimates Film EBITDA -25% PF to $300 million, Cable Nets EBITDA +6.3% to $1.137b and Print +14% PF to $172m. [They] reduced EBITDA by a $50 million intercompany elimination for TV product sold to Turner. EPS remains $0.53, down only 1% Y/Y due to repurchase accretion." Deutsche has a Buy rating and $40 price target on the shares.
Goldman is looking for Q310 revs of $6.517 billion and an EPS of $0.53. They see a 9% increase in Networks revenue, to $2.99 billion, with a 6% increase in operating income, to $1.031 billion. Filmed Entertainment should see income of $214 million, off 31% from 2009, the reflection of higher syndication revs and weaker theatrical performance. Publishing is expected to have a 5% bump in ads, though they believe that their estimates may be a little aggressive following management commentary. Goldman has a Neutral rating on the shares, with a price target of $39 over the next 12-months. They note "Time Warner is one of the more defensive stocks in the media sector given that only 20% of its revenue is generated from advertising."
In late October, UBS said that they expect strong results from cable operators in Q3/Q410 "given the solid demand and general lack of inventory available, which is driving up CPMs into the teens vs. the upfront, though as high as the 30%+ range for certain dayparts on sought after networks."
Time Warner Inc. is expected to release their Q310 earnings on Wednesday, November 3, 2010, at approximately 7:00am EDT. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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