The cable television business helped propel Time Warner to a 51 percent increase in net income and offset weakness in magazine publishing and movies in the three months that ended Dec. 31.
The media company said Wednesday that an increase in advertising revenue and subscription fees paid by cable and satellite companies to carry channels like TNT and TBS helped lift net income in the fourth quarter to $1.17 billion, or $1.21 a share, up from $773 million, or 76 cents a share, in the same three-month period last year. Revenues remained flat at $8.2 billion.
The results underscore the widening gap between the fast-growing cable television business and the more challenged magazine publishing industry and, to a lesser degree, the movie businesses.
Time Warner said Wednesday its board had approved $4 billion in stock buybacks and that it would raise its quarterly dividend by 11 percent to 28.75 cents per share.
Jeffrey L. Bewkes, Time Warner’s chairman and chief executive, called the able television business the “core of the company.†He praised the premium cable channel HBO and the interest fueled by returning series like “Game of Thrones†and “True Blood†and new original series like “Girls.†HBO saw an increase in domestic subscribers in the quarter, the company reported.
At the same time, Time Inc., the nation’s largest magazine publisher, readied for layoffs of 6 percent of its global workforce, cutbacks that it announced last week. Time Warner estimated the reductions would cost an estimated $60 million in restructuring charges, which will be reported in the first quarter of 2013.
Revenue at the television networks, which include TNT, TBS, and CNN, rose 5 percent to $3.67 billion in the quarter. Subscription and advertising revenues at Time Warner’s suite of cable channels grew 7 percent and 3 percent, respectively, in the quarter, compared with last year. An increase in the number of National Basketball Associa! tion games on Turner channels, as well as coverage of the presidential election on CNN, led to higher ratings.
Mr. Bewkes said that even with the boon from election coverage, CNN’s ratings disappointed. He praised the recent choice of Jeff Zucker, a former chief executive of NBC Universal, to lead CNN. “I’m optimistic that with the new leadership we’ve announced, CNN will once again fulfill the promise of its iconic brand,†he said on a conference call with analysts.
Revenue at the Warner Brothers studio fell 4 percent in the quarter to $3.7 billion, due largely to a tough comparison with 2011, which included the home entertainment release of the popular “Harry Potter and the Deathly Hallows: Part 2.†The performance of “Argo†and “The Hobbit: An Unexpected Journey†boosted Warner Brothers’ performance in the quarter and contributed to a 29 percent increase in operating income to $522 million.
Last week, Time Warner announced that Kevin Tsujihara, currently the headof the studio’s home entertainment division, would succeed Barry M. Meyer as chief executive of Warner Brothers. “I chose him because he’s got the greatest breadth of experience across Warner’s businesses,†Mr. Bewkes said Wednesday.
Time Inc., the publisher of People, Sports Illustrated and InStyle, represents a small part of Time Warner’s overall business, but nevertheless continued to weigh on the company’s overall results. Revenues at Time Inc. declined 7 percent to $967 million, while advertising revenues fell 4 percent, or $24 million. Subscription revenues remained flat.
For the full fiscal year, which also ended Dec. 31, Time Warner reported net income of $3 billion, or $3.09 per share, compared with $2.9 billion, or $2.71 per share in 2011. In the full fiscal year, revenues decreased 1 percent to $28.7 billion.
