Time Warner Inc.
) posted fourth-quarter 2012 adjusted earnings of $1.17 per share
that surpassed the Zacks Consensus Estimate of $1.10 and surged
approximately 24% from 94 cents earned in the prior-year quarter
due to strength witnessed across Networks segments and lower
However, including one-time items, quarterly earnings came in
at $1.21 per share, up 59% from the year-ago quarter.
This Zacks Rank #2 (Buy) stock now projects low double-digit
growth rate in earnings per share for 2013. The current Zacks
Consensus Estimate for 2013 is $3.64, reflecting an increase of
11% year-over-year. The company's investments in content and
technology in the recent years have boded well.
Time Warner's total revenue in the quarter slipped marginally
by 0.4% to $8,164 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 $8,246 million.
Adjusted operating income surged 16% to reach $1,980 million,
whereas adjusted operating margin expanded 350 basis points to
The Walt Disney Company
), one of Time Warner's competitors, posted first-quarter fiscal
2013 earnings of 79 cents a share that surpassed the Zacks
Consensus Estimate by a couple of cents but inched down 1.3% from
the comparable year-ago quarter.
division's revenue, which includes Turner Broadcasting and HBO,
rose 5% to $3,665 million, driven by growth of 7% in subscription
revenue and 3% in advertising revenue, partly offset by a decline
of 9% in content revenue. Adjusted operating income for the
segment increased 17% to $1,336 million attributable to growth in
revenue and fall in expenses, including reduced programming
Higher subscription revenue was primarily attributed to a rise
in domestic rates and to some extent growth in domestic
subscribers at HBO and internationally.
Advertising revenue gained due to growth witnessed at Turner's
domestic entertainment networks on account of rise in pricing,
increase in NBA games count and higher ratings at CNN resulting
from presidential election, partially offset by sluggishness
experienced at Turner's international networks mainly due to the
adverse impact of foreign currency translation and cease of
Turner's general entertainment network, Imagine, in India and
shutdown of TNT television operations in Turkey.
Film and TV Entertainment
segment revenue dipped 4% to $3,723 million due difficult
year-over-year comparison as the year-ago period benefited from
the home entertainment release of
Harry Potter and the Deathly Hallows: Part 2
and the release of videogame of
Batman: Arkham City
, partially offset worldwide theatrical performance of
The Hobbit: An Unexpected Journey
Adjusted operating income for the division, which comprises
Warner Brothers, soared 28% to $555 million principally due to
the performance and timing of theatrical releases, reduced print
and advertising costs, and television product mix. This was
partly offset by decrease in home entertainment and videogames
revenue fell 7% to $967 million reflecting a 4% decline in
advertising revenue and 39% drop in other revenues. Subscription
revenue remained even with the prior-year quarter. Adjusted
operating income fell 10% to $201 million from the prior-year
Other Financial Aspects
Time Warner ended the quarter with cash and cash equivalents
of $2,841 million, long-term debt of $19,122 million and
shareholders' equity of $29,878 million.
During the quarter, Time Warner incurred capital expenditures
of $217 million and generated free cash flow of $990 million. The
company's Board on Feb 5, 2013, hiked its quarterly dividend by
11% to 28.75 cents a share. The increased dividend will paid on
Mar 15, 2013 to shareholders of record as of Feb 28, 2013.
From Jan 1, 2012 through Feb 1, 2013, Time Warner bought back
84 million shares, aggregating $3.5 billion. The company's Board
of Directors authorized a share buyback plan of $4 billion in Jan
2013, overriding the previous authorization.
Other Stocks to Consider
Apart from Time Warner, other media conglomerates worth
) both of which hold the Zacks Rank #3 (Hold).
CBS CORP (CBS): Free Stock Analysis Report
DISNEY WALT (DIS): Free Stock Analysis Report
TIME WARNER INC (TWX): Free Stock Analysis
VIACOM INC-B (VIAB): Free Stock Analysis
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