NEW YORK (TheStreet) -- Shares of Time Warner (TWX) are rising by 2.49% to $71.34 on heavy trading volume late Tuesday afternoon, as the company's CEO reportedly said he is open to a sale of the company.
Jeff Bewkes told investors in private meetings yesterday that he would not support a sale or spinoff of the company's flasgship HBO network, according to the New York Post. However, he hinted that he would consider a sale of the company.
Spinning off HBO or Turner Broadcasting cable TV does not make sense because scale is more and more important in the media world, Beweks said, according to sources cited by the Post.
"Splitting up can destroy value," he told one investor, referencing the break up Viacom (VIAB), the Post added. The company's stock has struggled since Sumner Redstone broke it up a decade ago.
Bewkes wants to "increase shareholder value," he said when questioned about a sale of Time Warner, the Post noted.
Earlier, it was reported that Carl Icahn was building a large stake in the company. The billionaire investor denied those claims.
About 11.29 million of the New York City-based company's shares were traded so far this afternoon, compared to its average of 7.7 million shares per day.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate TIME WARNER INC as a Buy with a ratings score of B. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TIME WARNER INC has improved earnings per share by 13.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TIME WARNER INC increased its bottom line by earning $4.39 versus $3.56 in the prior year. This year, the market expects an improvement in earnings ($4.67 versus $4.39).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Media industry average. The net income increased by 7.0% when compared to the same quarter one year prior, going from $967.00 million to $1,035.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.97, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
- You can view the full analysis from the report here: TWX