Time Warner's Q2 Gives Wall Street What It Wants

Published on August 4, 2010
by Peter Kafka

Quick summary of Jeff Bewkes’s Q2: a pleasant surprise. Time Warner’s (TWX) revenues of $6.4 billion and earnings of $0.50 a share were both higher than Wall Street’s expectations of $6.2 billion and $0.45, respectively. Conference call is at 10:30 am ET, and I’ll check back in then, but for now here’s J.P. Morgan (JPM) analyst Imran Khan’s take:

  • TWX reported revenue of $6.38B, vs. our estimate of $6.06B, up 7.7% Y/Y. Adjusted operating income of $1.20B was $90M better than our estimate. We note that the beat came from cable networks, which we see as higher quality than film.
  • Filmed Entertainment revenue was $2.52B, ahead of our estimate of $2.26B, up 7.8% Y/Y. Segment operating income was $173M, while we estimated $171M.
  • Cable Networks revenue was $3.17B, and Adjusted Operating Income was $981M, while we estimated at $931M.
  • Publishing revenue came in at $919M, in line with our estimate, up 0.4% Y/Y. Segment Adjusted Operating Income was $153M, vs. our est. of $142M.
  • Reported diluted EPS ex-items of $0.50, vs. our estimate of $0.44.
  • On the call we will be looking for commentary on the advertising market recovery and cable networks cost trends as well as for an update on capital allocation.

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