The Key Factors Impacting Time Warner’s Stock Price



Time Warner’s year-to-date stock performance

On April 26, 2017, Time Warner (TWX) stock closed at $100.20. It’s risen 3.8% year-to-date (or YTD).

In contrast, The Walt Disney Company (DIS) has seen its stock price rise 10.9% YTD. Comcast (CMCSA) and 21st Century Fox (FOXA) have seen their stock prices rise 12.4% and 9.6%, respectively, YTD.

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What could benefit Time Warner stock?

AT&T’s (T) proposed acquisition of Time Warner (TWX) seems to be on the verge of approval from the U.S. Department of Justice. The FCC (Federal Communications Commission) recently approved the sale of Time Warner’s television station in Atlanta to Meredith Corporation. We’ll discuss this later in our series.

During its recent 2016 results announcement, Time Warner (TWX) reported revenue of $29.3 billion for the year, a rise of 4% year-over-year (or YoY). The company posted adjusted operating income of $7.6 billion, a rise of 10% YoY. In 4Q16, the company declared EPS (earnings per share) of $0.40 and adjusted EPS of $1.25. Its adjusted EPS of $1.25 exceeded Wall Street analysts’ consensus expectation of $1.19 per share.

In mid-February, Time Warner’s shareholders approved AT&T’s proposed acquisition. Time Warner is seeing robust demand for its content, not only in the United States but also in international markets. As a result, it expects a rise in its advertising and subscription revenue. At the end of 2016, Time Warner had free cash flows of $4.7 billion.

In this series…

In this series, we’ll look at the key factors that could impact Time Warner in the United States as well as internationally.

Time Warner makes up 0.37% of the SPDR S&P 500 ETF (SPY). SPY has 3.9% exposure to the computer sector.


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