Bank of America Tweaks Time Warner's Estimates

In a research report published today, Bank of America expects Time Warner's

Q1 to show flattish revenue and growth. According to Bank of America, "Key 1Q drivers incl.: (1) mid-single digit adv. growth at Networks, (2) steady affil. fee growth, (3) improved ratings at TBS, (4) a greater number of NBA game airings on TNT and (5) favorable theatrical gains, aided by Journey 2: The Mysterious Island and Sherlock Holmes: A Gamer of Shadows. Key offsets: (1) tough content syndication comps at Cable Networks due to last year's second cycle sale of Sex and the City, (2) a $30-35mn content write-down at HBO from Luck cancellation, (3) sluggish ratings at TNT, (4) more NBA gamerelated expense at TNT (w/lower adv. revenue per game due to advertiser budget leakage ahead of the season's late start) and (5) profit headwinds at Publishing. We project $625mn of buybacks in the Q." Bank of America maintains its Neutral rating and $40 PT on Time Warner, which closed yesterday at $35.72.