The Zacks Analyst Blog Highlights: Time Warner, Lions Gate, Time Warner Cable, Netflix and AmerisourceBergen

Apr 02, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, April 2, 2013 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Time Warner Inc. (NYSE: TWX), Lions Gate (NYSE: LGF), Time Warner Cable Inc. (NYSE: TWC), Netflix, Inc. (Nasdaq: NFLX) and AmerisourceBergen Corporation (NYSE: ABC).


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Here are highlights from Monday's Analyst Blog:

Time Warner Records New High

Time Warner Inc.'s (NYSE: TWX) strategic initiatives and an upbeat guidance facilitated it to record a new 52-week high of $58.02 on Thursday, Mar 28.  

Shares of this media and entertainment company eventually closed at $57.62, recording a healthy return of 15.8% year to date. The company currently trades at a forward P/E of 15.67x, almost at par with the peer group average of 15.69x.

Alongside, one of the company's peers, Lions Gate (NYSE: LGF), reached a new 52-week high of $24.15 on Thursday, Mar 28.  

Time Warner has been expanding its digital presence, enabling consumers to enjoy its content through numerous platforms and devices. Alongside, it has entered into content distribution deals with companies like Time Warner Cable Inc. (NYSE: TWC) and Netflix, Inc. (Nasdaq: NFLX).

Meanwhile, Warner Bros. became the first movie studio to offer video on demand, and acquired Flixster, a movie search application on smartphones and mobile devices.

The company also launched a digital movie technology, UltraViolet, through which consumers have the choice to watch movies on their preferred Internet-connected devices. The device is available in the U.S., Canada and the U.K., and now the company plans to launch the technology in Australia, France, Germany, Ireland and New Zealand.

Time Warner has been actively managing its cash flows returning much of its free cash to shareholders via dividend and share repurchases. During the last reported quarter, the company generated free cash flow of $990 million.

Time Warner hiked its quarterly dividend by 11% to 28.75 cents a share and announced a new share buyback plan of $4 billion. From Jan 1, 2012 through Feb 1, 2013, Time Warner bought back 84 million shares, aggregating $3.5 billion.

Going forward, this Zacks Rank #3 (Hold) stock projects low double-digit growth rate in earnings per share for 2013.

AmerisourceBergen Sells Canadian Biz

AmerisourceBergen Corporation (NYSE: ABC) recently announced that the company has entered into a definitive agreement with Canadian distributor Kohl & Frisch Limited aimed at divesting its Canadian Pharmaceutical Distribution Business.

As per the agreement, AmerisourceBergen Corporation will sell its Canadian pharmaceutical distribution business, AmerisourceBergen Canada Corporation (ABCC) to Kohl & Frisch Limited for approximately $80 million$100 million. AmerisourceBergen Corporation will hang on to its specialty business unit in Canada.

The performance of the ABCC unit has been disappointing in recent times. On its first quarter fiscal 2013 earnings conference call in Jan 2013, AmerisourceBergen stated that ABCC was having a tough time in implementing a large new retail contract in the Canadian market due to significant reimbursement challenges, particularly for generics.

The transaction is expected to close in the third quarter of fiscal 2013. As a result of the sale, AmerisourceBergen Corporation expects to record an estimated loss on sale and other impairment charges in the range of $160 million and $180 million in the second quarter of fiscal 2013.

Consequently, AmerisourceBergen revised its guidance for 2013. AmerisourceBergen now expects revenues in 2013 to grow by roughly 8% to 10% compared to the previous guidance of 8% – 11%.

AmerisourceBergen increased its earnings guidance in fiscal 2013 to $3.04$3.14 from the earlier estimated range of $2.96$3.06. The Zacks Consensus Estimate for fiscal 2013 stands at $3.06.

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