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Earnings Preview: Time Warner 1Q seen up

LOS ANGELES (AP) -- Time Warner Inc. reports its first-quarter earnings before the market opens Wednesday as the market looks for fresh news about the spin-off of its troubled magazine unit, Time Inc.

WHAT TO LOOK FOR: Investors will likely ask management about any new plans for the magazine unit, which it plans to spin off into a separate publicly traded company by the end of the year.

Since the spin was announced March 6, shares have climbed nearly 8 percent. Investors expect that the remaining company, containing the Warner Bros. TV and movie studio and pay TV networks such as CNN, HBO and TNT, will be valued more highly once the magazine company is on its own.

The idea behind such spin-offs is to free growing assets from the drag of industries that are struggling, and for those slower-growth assets to attract investors who are betting on a turnaround.

During the quarter, Kevin Tsujihara also took the reins at the Warner Bros. movie studio, replacing Barry Meyer. Executives may talk about the future of the home video market, which is still suffering from a decline of DVD sales. They may also discuss the outlook for upcoming summer movies including "Man of Steel," a reboot of the DC Comics franchise which Warner Bros. owns.

WHY IT MATTERS: Time Warner's ability to adapt to new technologies is important to its survival in a changing media landscape. A healthier company will also do a better job of maintaining beloved franchises, including those that come from the DC Comics world.

WHAT'S EXPECTED: Analysts polled by FactSet are looking for adjusted earnings of 75 cents per share on revenue of $7.15 billion.

LAST YEAR'S QUARTER: In the March quarter a year earlier, Time Warner posted adjusted earnings of 67 cents per share on $6.98 billion in revenue.