NEW YORK Time Warner Inc.'s profit jumped 34 per cent in the fourth quarter, boosted by the sale of Internet access businesses in Europe and a deal that added new subscribers to its cable TV unit.
The world's largest media company, which owns Warner Bros., the magazine publisher Time Inc. and the second-largest cable TV operator in the country, said Wednesday it earned $1.75-billion (U.S.), or 44 cents per share, for the three months ending in December, up from $1.3-billion, or 28 cents a share, in the same period a year ago.
Revenues rose 8 per cent to $12.5-billion from $11.5-billion.
The results included a gain of $769-million from the sale of AOL's Internet access businesses in the U.K. and France as well as a restructuring charge at AOL of $179-million.
Excluding those gains and other one-time effects, operating income before depreciation and amortization rose 13 per cent to $3-billion from $2.7-billion in the same period a year ago on higher profits from cable TV systems and cable TV networks such as HBO and TBS.
The company also recorded an expense of $615-million related to securities litigation.
Without one-time items or discontinued operations, the company posted profits of 22 cents per share in the most recent period, in line with the estimates of analysts polled by Thomson Financial, versus 23 cents per share in the year-ago period.
Time Warner's cable unit in July of last year acquired a number of cable subscribers from Adelphia Communications Corp. in a three-way deal with Comcast Corp., the top cable company in the country. Following the deal, Time Warner had about 13.4 million cable subscribers.
Revenues at the company's AOL unit fell 8 per cent and adjusted profits fell 10 per cent as it continues to revamp its business model away from selling Internet access and toward selling online advertising.
AOL began offering many of its services for free in hopes of attracting more traffic online. AOL lost another 2 million U.S. Internet access customers in the quarter, leaving it with 13.2 million as of the end of the year.
Time Warner also said it expects full-year earnings for 2007 to be $1 per share, assuming it completes its $20-billion stock buyback program in the first half of the year. Analysts polled by Thomson Financial had been expecting $1.01.
For the full year, Time Warner earned $6.55-billion, or $1.55 per share, up from $2.67-billion, or 57 cents per share, a year earlier, as revenues rose 4 per cent to $44.2-billion from $42.4-billion.
Both periods included significant one-time effects, including gains from asset sales and expenses related to settling shareholder lawsuits and government investigations, a legacy of the fallout from the company's agreement to be bought by AOL in 2000.
Excluding special items and in both periods as well as discontinued operations, full-year earnings came to 81 cents per share versus 73 cents per share in the prior year.
Time Warner shares rose 2 cents to $22.06 in pre-market trading.