Time Warner Inc. (NYSE: TWX) will report earnings tomorrow morning. Analysts expect earnings of 20 cents a share, a 5% increase over a year ago, on sales of 11.5 billion (5% higher than a year ago), according to CNN/Money. Bloomberg quotes several analysts who say the strong performance is driven by cable.

According to Factset, most analysts have not changed the 2007 forecasts while the stock has gone up. So why is the stock moving North?

Over the weekend, the "Breaking Views" section of the Wall Street Journal recited the laundry list of reasons that Time Warner Inc. (NYSE:TWX) stock has moved to over $20 for the first time in four years. Investors appear to be waiting for a spin-off of the cable unit, and some improvement at AOL, or, perhaps, even its sale.

It would also appear that investors hope Time Warner will have something of a "November surprise" when earnings are released tomorrow.The surprise would have to be of a significant enough magnitude to move the shares up through the end of the year.

What are the possibilities? Time Warner management might announce that it is looking at a major acquisition in cable, perhaps Cablevision, but the dilution or debt that such a move might add could send the shares down.

Or perhaps the company could announce it is shedding another division. Time Warner's two troubled divisions are the studio operations, anchored by Warner Bros, and Time, Inc., the company's flagship magazine operation. Wall Street is enamored of neither. Both have been drags on earnings.

I think if Time Warner really wants to earn another round of applause from Wall Street, it would have to tell investors that the bankers have arrived and that it will part company with one of these two divisions.

Get up early November 1. You never know what you might hear.

Douglas McIntyre is a partner at 24/7 Wall St.