When media giants Time Warner and Twenty-First Century Fox report earnings Wednesday, investors will listen for what their results might mean mean for a potential merger between the two. The quarterly reports—and their earnings calls—are a crucial opportunity for both companies to make their case to investors: Fox for buying Time Warner, Time Warner for staying independent.
For Fox, which reports after the bell, the question is how it'll grow its stock's value. The stock is the currency for its proposed acquisition, comprising 60 percent of the offer. Other key factors investors will be watching include the company's buyback plan, its debt, the health of its advertising business—particularly in light of lower ratings at its eponymous network—and succession plans after the eventual retirement of Rupert Murdoch.
The biggest question is whether the company is willing to raise its bid for Time Warner, which reports before the bell. And if it is willing to spend more, how much? And will Murdoch, who hasn't been on a Fox (and before that News Corp.) call for years, be on this week's call?