Time Warner Cable Inc (TWC), Time Warner Inc (TWX): No Image Problem on Wall Street

Time Warner’s management reflected the company’s prospects when it upped its 2013 growth guidance to the level of the mid-teens, with the shift coinciding neatly with the forthcoming fee-renewal cycle. Time Warner had said that “it feels well positioned ahead of the cycle, reiterating double-digit domestic fee growth guidance at Turner in 2013-16,” Barclays Capital pointed out in a recent report to investors. “We maintain price target at $68, reflecting optimism in affiliate renewals, advertising revenue, and overall network strength.”

Time Warner is on a nice roll, having surpassed the consensus earnings per share projections in the past two quarters. Time Warner gave the Street more reason for optimism when it reiterated its expectation heading into the affiliate-fee renegotiations, noting that a recently confirmed deal with a major distributor was greeted on good terms. The company had declared that these talks would give way to double-digit affiliate fee growth levels during the next several years. “As a result, TWX raised FY2013 EPS growth expectations to mid-teens compared to low-double digit growth announced after 1Q,” Barclays pointed out.

Time Warner stockholders can rest easier, still, by reflecting on the strong performance of the company’s recent movies. The films unit closed at a positive 13% year over year in the second quarter, sparked by Man of Steel and The Great Gatsby. Even if ticket sales slow, remember that Time Warner can look forward to a Hobbit sequel. Time Warner has flourished with such movie franchises as The Matrix and Harry Potter — clearly this is a company that knows the power of having a continuous movie cash cow.

The lesson here is that Wall Street stockpickers and securities analysts don’t worry as much about a company’s image on Main Street.

The article Time Warner: No Image Problem on Wall Street originally appeared on Fool.com and is written by Jon Friedman.

Fool contributor Jon Friedman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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