Stock Preacher

Time Warner Inc is expected to sell the Time Inc magazine unit and could buy holdings in its core entertainment category according to a large shareholder. “Time Warner just spun off their cable division, they are going to sell their print division, they are going to spin off AOL and they’re just going to be Warner Brothers, HBO and the Turner Networks,” said Crawford, managing director of The Capital Group. “Now, they will make acquisitions … but they’re probably going to buy just stuff in their wheel house of those businesses. They’re not going to, I don’t think, go very far afield from their core competency.” Crawford made the comments during a September 24 discussion at University of Southern California’s Annenberg School for Communication entitled “The Art of the Long View: The Media Company of 2020.” Time Warner declined to comment Saturday. Time Inc’s magazines include popular titles such as People and Sports Illustrated. In the second quarter, revenue at Time Inc publishing, the largest U.S. magazine publisher, fell 22 percent to $915 million due to a 26 percent decline in advertising revenue.

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Let’s have a look at Time Warner, Inc; the world’s largest entertainment company, a Giant among Giants, United States (NYSE: TWX), from a Technical POV (point of view). The overall analysis after today;s (11/11/08) market action is Bearish, in the near term Neutral, mid-term Very Bearish, and long term Bearish. The trend on TWX is Bearish.

Today Time Warner, Inc. closed minus .20 pts at 9.69 on below average volume of 22.3MM/shrs (avV 32.5MM/shrs) on the day (Nov. 11, 2008). There are 2 Open Gaps Down on the chart between, September 14, 2008 at 14.82 and October 22, 2008 at 10.20, the 1st support level is 9.19, the 2nd is 8.81, the near term resistance is 10.11, and the 50 day moving average is 11.49.

Recent News: http://biz.yahoo.com/paidcontent/081110/1_329556_id.html?.v=1

This is Time Warner, Inc.: Among all media companies TWX, is a Giant, the world’s largest media conglomerate with operations covering motion picture production and distribution, television, cable TV, publishing, and online content and services. Its film and TV production division is the venerable Warner Bros. Entertainment, the WB brand includes Warner Bros. Pictures and New Line Cinema, and its television properties include Cinemax, HBO, and Turner Broadcasting. Time Warner Cable is the #2 cable operator in the US, serving more than 14 million subscribers, and AOL attracts more than 100 million Internet users to its online content portal. The publishing unit, Venerable Time Inc., is the # 1 consumer magazine publisher with such titles as Fortune, People, and Time. 2007 sales: $46.5B, Employees: 86,000+.

Note: In the motion picture production and distribution sector consumer spending drives demand. The profitability of individual companies depends on creativity, marketing, and distribution. Large companies have the advantages of long term contracts with key actors and directors, a permanent staff of technical employees, and wide distribution networks. Small companies compete by creating marketable movies, often for niche audiences, on low budgets. Although production work is labor-intensive, the value of the product results in high average annual industry revenue of $300,000 per employee.

The Competition

Disney

News Corp.

Viacom

The US economy heavily influences business spending for entertainment products. The success of programming companies depends heavily on strong technical expertise. The success of packaged-software companies depends on technical expertise and good marketing. Small entertainment companies compete mainly by developing packaged products in small niches or producing custom products for individuals. Many small companies form alliances with larger ones to make and market their products.

The Time, Inc. unit needs to eliminate 600 jobs this quarter, made a big stride toward that goal today, November 11, with a major overhaul of its consumer marketing and sales operations by shifting responsibility for those functions from the magazine level to the group level, resulting in 92 layoffs.

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