Going Deep: Headlines Don't Tell Story in Recent Xerox, Time Warner Releases - TheStreet

There may be a difference between you-know-what and Shinola, but judging by recent

Xerox

(XRX) - Get Report

and

Time Warner

(TWX)

press releases, some major companies seem more than happy to mix the two.

Both Xerox and Time Warner avoided simply giving the financial world their bad news straight, opting instead to water down the painful information by offering it along with other news that, at first glance, would seem totally unrelated to the companies' sluggish overall performance.

On Dec. 18, Time Warner issued a press release trumpeting an increased ownership stake in cable Internet service Road Runner, a move it said would "strengthen Time Warner Cable's Leadership in Driving Growth of Broadband Internet Services." OK. Impressive.

Seven paragraphs later, though, it mentions that its December quarter would reflect poor box office performance of

Little Nicky

-- finally, an answer to the age-old question, How Much Is Too Much Adam Sandler? -- and softness in cable network advertising revenue as well as weaker-than-anticipated music sales.

Any locusts on the way, boys? Or can you fold that into a footnote? A spokesman for Time Warner, where shares are down roughly 12% to around $55 since the announcement, didn't return a call seeking comment.

Xerox pulled a similar stunt Thursday morning, although a company spokesman pleads to the contrary.

A press release bearing the simple-enough headline, Xerox Completes Sale of China Operation for $550 Million Cash, doesn't give the slightest indication that there's also news of the cash-strapped company drawing down the last of its $7 billion revolving credit agreement and a messy fourth quarter that won't match even the previous quarter's weak performance.

To the company's credit, it did top the release with what the spokesman called a "double-barreled" lead, covering both the China sale and the soft fourth quarter. Trying to sneak bad news by the world, he said, would be considered "poor form."

Many investors did figure out the Xerox news, and drove the stock down $1.13 to $4.88 halfway through today's session.

The problem: Typically, only the headline comes across the press release wires to investors of all sizes. Granted, the sale of the Chinese operation is a big deal for a company trying to maintain its cash reserves and rebuilding its struggling business. A dash of context, however, would have given investors a better handle on exactly what was going on.

It might even have given more of them a clear reason to sell some Xerox shares this morning.