Earnings on Tap: AOL, Time Warner

 AOL  declares earnings before the market opens Wednesday. A consensus of Wall Street analysts project the firm to post earnings per share of $0.17, compared with $0.32 in the same quarter last year.

Analysts would likely focus on the effectiveness of its strategy to turn around its business by buying up content properties such as the Huffington Post, and they will also watch for metrics such as traffic and online ad revenue.

The firm might also be expected to outline its growth strategy and discuss further efforts to divest entities that don't generate a profit. 

Morningstar analysts are downbeat on AOL's prospects during the next few years, given its declining user base and a steep drop in the dialup business. However, they feel the stock's current price might be undervalued, compared with its fair value estimate, which implies a price/earnings ratio of 16 times.

Media giant  Time Warner , the erstwhile owner of AOL, also declares results before the bell, and analysts, on average, expect the company to clock earnings of $0.57 per share, as opposed to $0.62 in the year-ago quarter.

Markets may cue into signs advertising spending is on an uptrend as the economy slowly gathers pace.

Recently, the company introduced a widely successful iPad app that enables users to watch live TV. On the film-studio front, management might outline efforts to offset declining DVD sales, such as its deal with  Netflix (NFLX) and Redbox.