Time Warner Inc.
), the diversified media conglomerate, posted third-quarter 2012
adjusted earnings of 86 cents a share, surpassing the Zacks
Consensus Estimate of 82 cents and jumped approximately 8.9% from
79 cents earned in the prior-year quarter due to strength
witnessed across Networks segments. However, including one-time
items, quarterly earnings increased 10.3%.
Time Warner reiterated its low double-digit growth rate
expectation for fiscal 2012 earnings per share. The current Zacks
Consensus Estimate for fiscal 2012 is $3.21 per share, reflecting
a growth of approximately 11% from fiscal 2011.
Time Warner's total revenue in the quarter slipped 3% to
$6,842 million from the prior year-quarter attributable to
revenue declines across Film and TV Entertainment and Publishing
units, partially offset by growth witnessed in Networks segment.
The reported revenue also fell short of the Zacks Consensus
Estimate of $6,900 million.
Adjusted operating income declined 1.4% to reach $1,582
million, whereas adjusted operating margin came in at 23.1%
compared with 22.7% in the prior-year quarter.
division's revenue, which includes Turner Broadcasting and HBO,
rose 4% to $3,339 million, driven by an increase of 7% in
subscription revenue partially offset by a 1% decline in
advertising revenue. Adjusted operating income for the segment
increased 12% to $1,223 million attributable to growth in
Film and TV Entertainment
segment revenue dipped 12% to $2,897 million due difficult year
over year comparison. Adjusted operating income for the division,
which comprises Warner Brothers, plunged 38% to $330 million due
to fall in revenue.
revenue fell 6% to $838 million reflecting a 5% decline in
advertising revenue on account of sluggishmagazine advertising
demand along with a 6% drop in subscription revenue on account of
reduced newsstand revenue globally. Moreover, other revenues also
declined 18%. Adjusted operating income inched up 2% to $126
million from the prior-year quarter, principally due to lower
Other Financial Aspects
Time Warner ended the quarter with cash and cash equivalents
of $3,188 million, long-term debt of $19,122 million and
shareholders' equity of $30,019 million.
During the quarter, Time Warner incurred capital expenditures
of $143 million and generated free cash flow of $1,431
From January 1, 2012 through November 2, 2012, Time Warner
bought back 59 million shares, aggregating $2.3 billion. The
company's board of directors had authorized a share buyback plan
of $4 billion in January 2012.
Currently, we have a long-term Neutral recommendation on the
stock. Moreover, Time Warner, which competes with
Walt Disney Company
), holds a Zacks #3 Rank that translates into a short-term Hold
rating, and correlates with our long-term view.
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