Clock Ticks at Time Warner

Analysts polled by Thomson Financial will be looking for the company to earn 20 cents per share on $10.99 billion in revenue.

Time Warner's underperformance has persisted even after Parsons defused last year's crusade by hedge fund activist Carl Icahn. The sides reached a truce early this year that called for a big share buyback and other supposedly shareholder-friendly measures. Yet Time Warner stock continues to stumble along.

For the second quarter, cable results are expected to be strong in light of Thursday's healthy report from rival Comcast.

Prudential analyst Katherine Styponias expects to see double-digit revenue gains at Time Warner Cable this quarter. Prudential's projections call for $2.69 billion in revenue, up 14% from last year. Revenue-generating units may be down 4%, however, coming off what Prudential describes as an "exceptional second quarter of 2005." For its part, Comcast posted what it called record unit growth in the latest period.

In recent weeks both the Federal Communications Commission and the U.S. Bankruptcy Court finalized details on the Adelphia Communications acquisition by Time Warner and Comcast. Out of that deal, Time Warner Cable will add some 3.5 million Adelphia subs.

"We have a high degree of confidence in the ability of Time Warner Cable management to eventually bring the OIBDA margin of Adelphia in line with its own," Styponias says, adding that the deal should help lift growth rates. Time Warner is committed to spinning off a portion of its cable division. Styponias or a member of her team has a Time Warner stake.

In filmed entertainment, the company faces tough comparisons to last year. That fix won't be eased by undersea flop Poseidon, which tanked this spring. Home-video returns should make up much of the difference. Styponias writes that the division "is facing very difficult comparables due to last year's strong box-office performances of Batman Begins and Monster-in-Law." Revenue is expected to be flat.

At the networks division, revenue is expected to grow in the single digits. Results may be compromised somewhat by what has reportedly been a soft cable advertising market and the migration of ad dollars online. Still, the company's top-shelf networks should hit high single-digit growth regardless.

Prudential, which has a neutral weight rating and $21 price target on Time Warner, expects publishing revenue to be up 4%.

But to be sure, all eyes will be on a planned metamorphosis at AOL when the company details its latest intentions this week.

Time Warner traded up 1% to $16.50 on Monday.