Time Warner Raises Dividend 11% as Earnings Jump 51%

Wednesday, 06 Feb 2013 07:51 AM

 

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Time Warner Inc. said Wednesday that net income grew 51 percent in the last three months of 2012 even as revenue was largely unchanged. Rising fees from cable and satellite companies and higher ad revenue at the TV networks offset revenue declines at its movie studio and magazine businesses.

Net income was $1.17 billion, or $1.21 a share, for the final three months of 2012. That's up from $773 million, or 76 cents a share, a year earlier.

Adjusted for one-time items, earnings came to $1.17 per share. That beat the $1.10 per share that analysts surveyed by FactSet expected.

Revenue edged down to $8.16 billion from $8.19 billion a year ago. Analysts expected revenue of $8.22 billion.

Time Warner also said Wednesday that it is raising its quarterly dividend by 11 percent to 28.75 cents per share.

Time Warner's stock increased $1.54, or 3.1 percent, to $51.50 in premarket trading 70 minutes ahead of the market opening.

Revenue at Time Warner's TV business grew 5 percent to $3.7 billion as U.S. TV distributors paid more to carry channels such as TNT, TBS and CNN on their lineups. The company also had more U.S. subscribers for the HBO premium channels and saw growth internationally across the TV business, despite unfavorable currency-exchange rates. Revenue from those distributor and subscription fees rose 7 percent.

Ad revenue at the networks increased 3 percent because of better rates, more NBA games shown on Time Warner channels and increased viewership at CNN during the presidential election season. Licensing and other content revenue fell 9 percent mostly because of a shutdown of TNT operations in Turkey.

At the Warner Bros. studio business, revenue fell 4 percent to $3.7 billion, largely because of a weaker lineup. The same quarter in 2011 had revenue from the home release of the final Harry Potter movie and the video game "Batman: Arkham City." Theatrical releases of the first "Hobbit" movie and "Argo" in most recent quarter weren't enough to offset those declines. But operating income increased 29 percent to $552 million partly because of lower marketing and other expenses from the timing of movie releases.

The Time Inc. magazine business saw revenue fall 7 percent to $967 million as ad revenue fell and the company no longer had money from a school fundraising business sold in early 2012. Subscription revenue was flat.

The company expects 2013 adjusted earnings to be up in the low double-digit percentage. It was $3.28 per share in 2013, meaning the projected range is $3.61 to $3.77. Analysts expect earnings of $3.66 per share for 2013.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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