Time Warner net falls 36 pct; Will separate cable business
Wednesday April 30, 7:33 am ET
Time Warner's 1Q results down 36 percent following asset sale; plans cable spinoff
NEW YORK (AP) -- Time Warner Inc. reported a 36 percent decline in first-quarter profits Wednesday following an asset sale a year ago and said it would spin off the rest of its cable business.
The world's largest media conglomerate, which owns Warner Bros., AOL, CNN and Time magazine, earned $771 million or 21 cents per share in the first three months of the year, down from $1.2 billion or 31 cents per share a year ago.
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Revenues rose 2 percent to $11.42 billion from $11.18 billion.
The year-ago results were boosted by a gain on the sale of AOL's Internet access business in Germany.
Excluding one-time gains and losses in both periods, per-share results were 22 cents, in line with a year ago and a penny below the estimate of analysts polled by Thomson Financial.
Time Warner's latest results also included $116 million in restructuring charges related to consolidating its New Line Cinema movie studio into Warner Bros.
Analyst estimates normally don't account for such charges, which were equivalent to about 2 cents per share in the most recent period.
In premarket trading, Time Warner shares rose 8 cents to $15.35.
Time Warner had promised in February to deliver a verdict on the future of Time Warner Cable in its first-quarter earnings announcement.
Investors have long pressed Time Warner to simplify its sprawling corporate structure, and a spinoff of Time Warner Cable was seen by many as as highly desirable.
Time Warner had floated shares of its cable division just over a year ago, but held on to an 84 percent stake. Time Warner Cable is the No. 2 player in the industry after Comcast Corp. and is Time Warner's largest operating division by revenues.
The share offering came only after the completion of a drawn-out and complex three-way deal with Comcast to buy the assets of Adelphia Communications Corp., which was in bankruptcy.
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