Time Warner upbeat despite decline in sales
Full-year profit forecast raised even as advertising slumps
November 5, 2009
By Sarah Rabil New York
Time Warner, the owner of the Warner Brothers studios and Fortune magazine, raised its full-year forecast yesterday and posted third-quarter profit that fell less than analysts expected.
Earnings, excluding some items, dropped to 61c (R4.84) a share from 65c a year ago, beating the 54c average of estimates compiled by Bloomberg.
Adjusted earnings this year might rise to at least $2.05 a share from $1.98 last year, the New York-based company said. In July, Time Warner forecast earnings would be little changed.
Chief executive Jeffrey Bewkes is pushing for higher affiliate fees for the company's cable channels and spinning off AOL by year-end to help drive profit. Advertising revenue continued to fall at AOL and the magazines. DVD sales also tumbled, lowering Warner Brothers revenue from a year ago when The Dark Knight was released.
Analysts on average predict 2009 earnings, excluding some items, of $2.04 a share, implying growth of 3 percent.
Time Warner said its raised forecast included as much as $100 million in restructuring costs at Time, its publishing unit, in the fourth quarter.
Sales slipped 5.9 percent to $7.14 billion in the third quarter, compared with the $7.04bn average of estimates.
Warner Brothers, which released Harry Potter and the Half-Blood Prince and The Hangover, is the top-grossing studio this year in the US, pulling in $1.7bn in box-office sales through November 1.
In the slumping ad market, the publishing unit was preparing job cuts, a person with knowledge of the plans said two weeks ago. This would be the second round of firings in a year. - Bloomberg
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