TWX Shares Up 15 Percent In 2006; Finally Getting Quality Time At $20

The usual soothsayers are out as Time Warner prepares to announce Q3 earnings early Wednesday morning but one detail stands out — TWX has been above $20 several times in the last 10 days for the first time since May 2002. The stuck stock price has been one of the greatest frustrations for investors and execs alike as the company pushed every conceivable button to make it budge. It’s what drew Carl Icahn to try a coup. So why is it finally moving now? The cable business is being used by some investors as a guide, suggests in-house observer Paul LaMonica of CNNMoney.com. Time Warner Cable, which has been on a double-digit upswing, now accounts for one-fourth of the company’s revenue and a large chunk of operating income. The recent IPO was another plus. Fortune has some background on why TW is so profitable. CEO Dick Parsons and others have insisted that once investors could understand cable’s value to TW, it would show up in the stock price.
— AOL’s most recent strategy may be a contributing factor; certainly, the idea that AOL could be sold adds luster for some investors. TW spokesman Ed Adler says recent comments by AOL CEO Jonathan Miller were misunderstood and that AOL is not for sale.
— Analysts would love to see some positive movement from publishing and entertainment but AOL and cable are the bellwethers. It may be too soon to really gauge how well AOL is doing but execs have said the shift to free is paying off.
The earnings release should be out premarket; the webcast is scheduled for 8:30 a.m.

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