Skip to comments.Time Warner Profits Fall 53 Percent (Dinosaur Media DeathWatch™)
Posted on 11/07/2007 8:05:06 AM PST by abb
Time Warner 3Q Profit Falls but Harry Potter Helps Conglomerate Meet Wall Street Expectations
NEW YORK (AP) -- Time Warner Inc. on Wednesday reported a 53 percent decline in net income for the third quarter versus the same period a year ago, when results were boosted by tax and investment gains. The earnings met analyst estimates, though, as higher earnings from cable TV and movies including "Harry Potter and the Order of the Phoenix" outweighed a decline at AOL, which continued to lose subscribers as it shifts toward an online advertising model.
The media conglomerate, which also owns HBO, Warner Bros., CNN and Time magazine, earned $1.09 billion or 29 cents per share in the three months ending in September versus $2.32 billion or 57 cents per share in the same period a year ago.
Revenues rose 9 percent to $11.68 billion from $10.75 billion.
Investors are seeking changes from incoming CEO Jeff Bewkes, who takes over Jan. 1, to boost the company's long-lagging stock price, which is stuck at about the same level it was at five years ago. The company announced Bewkes' long-anticipated appointment on Monday, succeeding Dick Parsons, who is staying on as chairman.
The year-ago figures include gains from the sale of assets like Time Warner's Australian theme park business, as well as tax-related benefits.
Excluding one-time items and discontinued operations in both periods, the company earned 24 cents per share in the last quarter, in line with estimates of analysts surveyed by Thomson Financial, versus 19 cents per share a year ago.
Adjusted operating income before depreciation and amortization, a measure of profitability, rose 15 percent to $3.2 billion.
The largest gain came from Time Warner Cable, which posted 28 percent higher profits as it absorbed new subscribers from bankrupt Adelphia Communications Corp. and also signed up more customers for premium services including digital phone and high-speed Internet.
Earnings from movie production, which are often volatile because of hits and misses at the box office, jumped 71 percent on the latest "Harry Potter" movie as well as "Rush Hour 3" and "Oceans 13."
AOL reported a 23 percent drop in profits as higher advertising revenues weren't enough to offset more declines in subscription revenues.
Advertising revenues rose just 13 percent in the quarter, a decline from the 16 percent increase in the second quarter and 46 percent growth in the same period a year ago.
Time Warner said in its quarterly regulatory filing, also disclosed Wednesday, that it expects online advertising growth to slow even further in the fourth quarter due to price competitio for display advertising and lower search advertising results. That pressure is expected to continue in the first quarter of next year.
AOL lost another 851,000 subscribers, ending the quarter with 10.1 million U.S. Internet access customers, as it revamps its business plan toward selling advertising.
In its latest attempt to build online advertising business, AOL said Wednesday it would acquire Quigo, a company that matches online ads to the content of Web pages, for an undisclosed amount.
Time Warner's shares are off 7 percent over the past year, versus a 10 percent gain in the S&P 500 index. They closed at $18.33 Tuesday, up 52 cents but still close to the lower end of their 52-week range of $17.60 and $23.15.
Time Warner maintained its full-year earnings expectations of $1.07 per share, including 12 cents per diluted share related to after-tax gains, such as the sale of AOL's Internet access business in Germany.
Shares rose 9 cents to $18.42 in early trade Wednesday.
The Sands of TIME
.."they should put Rosie on the board of directors..that'll help"
Selling propaganda disguised as news is a good way to go broke.
BEWKES’ PAY TIED TO TIME WARNER PRICE
By PETER LAURIA
November 7, 2007 — Time Warner is planning to tie a large portion of CEO designate Jeff Bewkes’ compensation to its share price performance, The Post has learned.
When details of Bewkes’ pay package are filed with regulators, “a good share of it will be equity-based, more so than in his previous contract,” said a source familiar with the situation.
A precise breakdown of how Bewkes’ compensation will be tied to performance could not be obtained.
Tying Bewkes’ pay package to Time Warner’s share price is designed to help blunt the main criticism surrounding the organization: that it hasn’t been aggressive enough in boosting shareholder value.
And since most of Bewkes’ prior stock options are already under water, the move would also provide an added catalyst for him to start making changes at Time Warner, which have ranged from spinning off the remaining 86 percent of Time Warner Cable, selling or merging battered AOL with another portal, and selling out-of-favor magazine unit Time Inc.
To that end, Bewkes’ first order of business as CEO-designate was to announce the appointment of Time Warner Cable Chief Financial Officer John Martin to replace Wayne Pace as CFO of the entire organization.
All this proves liberalism is a disease. If they printed the truth vs. propaganda once in awhile, maybe they would be doing a little better. But you just cant teach an old dog new tricks, it seems!
Take money out of your wallet...now light it on fire...or buy Time Warner stock.
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