Needham Cuts Q2 Estimates for Time Warner; Maintains “Hold” Rating (TWX)

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Mass media giant Time Warner Inc. ( TWX ) on Friday saw its earnings estimates lowered by analysts at Needham & Co. ahead of the company's earnings report next month.

The firm also maintained its "Hold" rating, commenting, "We expect 2Q11 revenue to be up 6% y/y to $6.757B (no change). We are lowering our profitability estimates slightly to reflect higher expenses in the quarter in both the Filmed Entertainment and Cable Networks segments. As a result, we are lowering our EPS estimates to $0.55 (from $0.60) for 2Q11…We anticipate a solid 2H11 for TWX owing to the release of the final installment of the Harry Potter film series in mid-July as well as the sequel to Sherlock Holmes and therefore we are maintaining our FY2011 EPS estimate of $2.76."

The company is slated to deliver its second quarter earnings report on August 3, prior to the market open.

Time Warner shares fell 37 cents, or -1%, in premarket trading Friday.

The Bottom Line
Shares of Time Warner ( TWX ) have a 2.54% dividend yield, based on last night's closing stock price of $37.06. The stock has technical support in the $33-$35 price area. If the shares can firm up, we see overhead resistance around the $38-$41 price levels.

Time Warner Inc. ( TWX ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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