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Time Warner 4Q profit up
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February 2, 2000: 9:53 a.m. ET
Earnings of 20 cents a share top Wall St. forecasts on 10% revenue gain
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NEW YORK (CNNfn) - Time Warner Inc., the world's largest media and entertainment company, posted fourth-quarter operating profit Wednesday that exceeded Wall Street's expectations, aided by strong revenue from new subscribers to its cable stations and an increase in advertising in its popular magazines.
Time Warner, parent of CNNfn, posted operating income 20 cents a diluted share, up from 11 cents in the year-earlier quarter. Analysts polled by First Call Corp. had expected the New York-based company to earn 16 cents a share. Time Warner did not release the dollar amount that coincides with the operating per share earnings.
Excluding one-time charges from retiring some of its outstanding debt, selling or swapping some of its cable systems, and writing down its investment in broadcast satellite company Primestar Inc., the company earned $848 million, or 62 cents a share, compared with income of $90 million, or a loss of 17 cents a share after preferred dividend payments, a year earlier.
Revenue rose 10 percent to $7.99 billion from $7.27 billion a year ago.
Rising subscriptions to the company's cable businesses, including Turner Cable Networks, HBO, Time and Warner Bros., helped propel earnings in the latest quarter, Time Warner Chairman Gerald Levin said. A surge in advertising dollars both on its cable networks and within its magazines also helped boost the bottom line, he said.
What's more, the merger with America Online Inc. (AOL: Research, Estimates), announced earlier this month, will propel the company's growth even more, Levin said.
The results include Time Warner Entertainment, its partnership with MediaOne Group Inc., which owns Home Box Office, Warner Bros. and a large portion of Time Warner's cable systems. Time Warner also owns popular magazines such as In Style, People, Fortune and Time, the Warner Music Group, which recently announced a merger with London-based EMI Group PLC.
Cash flow -- or earnings before interest, taxes and amortization, and what analysts say indicates the health of a debt-laden company -- rose 79 percent to a record $2.45 billion from $1.37 billion.
For the full year, Time Warner posted operating earnings $1.89 billion, or 39 cents a diluted share, compared with a pro forma loss of $372 million, or 6 cents, in 1998. Excluding extraordinary items, earnings per share were $1.43 a share compared with a pro forma loss of 31 cents in 1998.
Time Warner (TWX: Research, Estimates) shares fell 2 Tuesday to 77-15/16. 
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