Wednesday morning is fourth-quarter reporting time for Time Warner
What Fools say:
Here's how Warner's CAPS scoring rates against some of its peers and competitors:
|
Market Cap (millions) |
Trailing P/E Ratio |
CAPS Rating |
|
|---|---|---|---|
|
News Corp. |
$60,363 |
18.5 |
|
|
Time Warner |
$57,364 |
12.8 |
|
|
Walt Disney |
$58,523 |
13.8 |
|
|
Yahoo! |
$39,358 |
62.7 |
|
|
Lions Gate Entertainment |
$1,172 |
N/A |
The bulls are scraping their hoofs right now, mumbling something about buyout opportunities, parts adding up to more than the whole entity today, and even an unabashed gut feeling. The bear arguments are more pointed, focusing on a broad market downturn and an old-school entertainment industry on the fast track to extinction.
What management does:
Warner is growing sales but shrinking profit margins, which adds up to a somber bottom-line trend overall. The good news comes from growing cash flows, even in the face of increased capital expenses.
|
6/2006 |
9/2006 |
12/2006 |
3/2007 |
6/2007 |
9/2007 |
|
|---|---|---|---|---|---|---|
|
Gross |
43.3% |
43.4% |
43.1% |
42.5% |
41.9% |
41.3% |
|
Operating |
17.4% |
17.8% |
17.8% |
18.0% |
18.0% |
18.1% |
|
Net |
10.9% |
14.2% |
14.8% |
13.9% |
13.9% |
10.9% |
|
FCF/Revenue |
4.9% |
5.2% |
10.1% |
7.5% |
6.9% |
7.9% |
|
Growth (YOY) |
6/2006 |
9/2006 |
12/2006 |
3/2007 |
6/2007 |
9/2007 |
|---|---|---|---|---|---|---|
|
Revenue |
1.7% |
2.1% |
4.3% |
6.8% |
8.1% |
9.0% |
|
Earnings (normalized) |
17.2% |
15.2% |
9.3% |
4.2% |
(1.6%) |
(1.4%) |
One Fool says:
Newly appointed CEO Jeff Bewkes has signaled that he wants to break up this unwieldy collection of businesses to unlock the value in a thriving entertainment production studio and troubled-yet-profitable cable provider network. But it's unclear where the laggardly AOL division would land.
Some of us had been hoping for Yahoo to buy that once-premium piece of unreal estate; others were waiting for Microsoft
While we ponder the fate of the online operation, entertainment content and broadcasting services will bring in the bacon. Not that those divisions don't have troubles of their own, but at least the issues are further ahead and there's still time to adjust accordingly. The latest Harry Potter DVD hit store shelves in time for the holiday rush, so this quarter should be just fine.
