Shares of media giant Time Warner Inc. TWX hit a new 52-week high of $88.82 yesterday and eventually closed trade a notch lower at $88.02, surging roughly 31.2% over the past one year. This media and entertainment company has gathered momentum from its strategic endeavors and stellar performance.
We believe Time Warner’s initiatives such as foraying into new markets, divestment activities and digital endeavors would augur well for its performance in the future. Moreover, the company’s focus on original programming, reducing costs and increasing investments in key areas is expected to enhance its profitability.
Apart from this, the company has been expanding its digital presence to enable consumers to access contents from several platforms and devices. Advancing its digital facilities should aid earnings growth.
Time Warner has also been benefiting from its significant international presence, which has helped the company to broaden its client base and product portfolio. The company operates in the United Kingdom, Germany, Canada, France, Japan and other countries apart from the United States.
Furthermore, the company’s positive earnings streak has provided support to the stock. In the trailing four quarters, the company’s earnings have outperformed the Zacks Consensus Estimate by an average of 15%, including 9.2% in the last concluded quarter.
Despite currency headwinds, this Zacks Rank #3 (Hold) company posted better-than-expected first-quarter fiscal 2015 results, wherein adjusted earnings per share of $1.19 came in ahead of the Zacks Consensus Estimate of $1.09, reflecting strength across Turner, Home Box Office and Warner Bros.
Moreover, Time Warner has been actively managing its cash flows in order to return much of its free cash to shareholders via dividend payment and share repurchases. From Jan 1, 2015 through Apr 24, 2015 the company bought back about 14 million shares, aggregating approximately $1.1 billion.
Apart from Time Warner, Campbell Soup Company CPB, The Walt Disney Company DIS and Dollar General Corporation DG also hit 52-week highs of $48.72, $114.47 and $78.86, respectively, yesterday.
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