Time Warner's profit beats Street, raises dividend
By Liana B. Baker
(Reuters) - Media company Time Warner Inc reported fourth-quarter net income that beat estimates, raised its dividend and started a new stock repurchase program, sending its shares up 5 percent.
Time Warner, which owns the CNN and TNT cable networks, premium TV service HBO, People magazine and a movie studio, said on Wednesday it is raising its quarterly dividend by 11 percent to $0.2875 per share. The company's board also authorized a new $4 billion share repurchase program that started in January.
"The big surprise here is the incremental return of capital to shareholders with the new dividend and buyback," said Janney Capital Markets analyst Tony Wible, adding that the shares were up on that news.
The company expects 2013 adjusted earnings to rise in the low double-digits in percentage terms from $3.28 per share in 2012. This matches the 11 percent increase that analysts, on average, were expecting.
The results came a day after Walt Disney Co reported earnings that beat estimates and said it expects the next few quarters to be better because of a stronger lineup of films and increased attendance at its theme parks.
Time Warner's top executives will hold a conference call later Wednesday. Rival News Corp is due to report quarterly results after the market closes.
Time Warner also plans To take a $60 million restructuring charge at its Time Inc magazines unit in fiscal year 2013. On January 30, the division said it will cut about 500 jobs, or 6 percent of its total staff, across the business division and newsrooms. The layoffs mark the first major move made by Time Inc Chief Executive Laura Lang, who joined the company in January 2012.
Operating income at the cable networks rose to $1.38 billion from $1.14 billion a year ago. The company reported a 7 percent increase in subscription revenue, driven partly by more HBO subscribers. Advertising revenues in the cable unit rose 3 percent. Continued...