Time Warner Boosts Dividend After Mixed Results

Warner Brothers logo
Warner Brothers logo

Time Warner Inc. (NYSE: TWX) reported fourth-quarter and full-year 2012 results before markets opened this morning.

The entertainment giant posted quarterly adjusted earnings per share (EPS) of $1.17 and $8.16 billion in revenue. In the same period a year ago, the company reported EPS of $0.94 on revenues of $8.19 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.10 and $8.25 billion in revenues.

For the full year, the company posted adjusted EPS of $3.28 on revenues of $28.73 billion, compared with $2.89 per share on revenues of $28.97 billion in 2011. The consensus estimate called for EPS of $3.21 on revenues of $28.86 billion.

On a GAAP basis, Time Warner reported quarterly EPS of $1.21 and full-year EPS of $3.09.

Time Warner also announced a dividend increase of 11%, from an annual total of $1.04 to a new total of $1.15. And the company commenced a new $4 billion share buyback program in January.

The company's CEO had this to say:

Last year, we also continued to successfully execute against our key strategic priorities, which are to invest aggressively in our content, to lead the digital transition of our industries, to expand internationally and to exercise financial discipline in everything we do. … [W]e continued to expand our TV Everywhere offerings at Turner and HBO, put the full weight of Warner Bros. behind the UltraViolet home entertainment industry standard for storing digital movies in the cloud and launched digital subscriptions for Time Inc.'s domestic magazines on all major tablet platforms.

In a separate announcement, the company said that full-year 2013 adjusted EPS are expected to grow in the "low double digits" from 2012's $3.28. The outlook includes a $60 million restructuring charge at TIME Inc. The consensus estimate calls for EPS of $3.65 on revenues of $30 billion. Using an EPS growth rate of 12%, Time Warner's estimate calculates out to about $3.67. The consensus analysts' estimate for the first quarter calls for EPS of $0.80 on revenues of $7.25 billion.

The company's Warner Bros. studio segment saw revenues fall by 5% year-over-year. The company attributed the drop to a banner year in 2011, with the release of two films in the Harry Potter franchise. Revenues at the studio also fell 4% sequentially, again attributed to last year's home entertainment release of a film starring the kid wizard.

Shares are trading up about 4% in the premarket this morning to $52.00, which would be a new 52-week high if it holds. The current 52-week range is $33.62 to $51.29. Thomson Reuters had a consensus analyst price target of $52.80 before today's results were announced.

Filed under: 24/7 Wall St. Wire, Dividends & Buybacks, Earnings, Entertainment, TV Tagged: TWX