Time Warner: Going Strong, Dumping Time

Maybe it’s good shows or maybe it’s good movies, but either way, Time Warner (NYSE:TWX) has managed to pull in enough for a year-on-year boost in earnings.

Time Warner consists of 3 big elements: the television networks division, the studios unit, and the publishing unit. While the first 2 of those units were quite successful in the first quarter, the publishing unit struggled to bring in enough for Time Warner to feel it was worthwhile to hang onto.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

For the quarter, the major media conglomerate earned an adjusted net income of $785 million. This was a 19 percent increase year-over-year, and was aided mostly by the networks division and studios unit. Comparatively, the publishing unit actually cost the company money.

The networks division is Time Warners largest unit, and currently home to one of the most popular shows on a premium cable network, “Game of Thrones.” The unit had an 11 percent increase in earnings from the year-earlier quarter. The studios unit experienced massive growth of 23 percent, which may have been helped greatly by the release of “The Hobbit” and the $1 billion the movie pulled in at the box offices worldwide.

However, the publishing unit was disappointing. Apparently iconic magazines like Time Magazine and Sports Illustrated have been having trouble keeping up with more modern media. The unit posted an operating loss of $9 million — a loss 125 percent greater than the year earlier quarter.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

In Time Warner’s earnings call, it announced plans to rearrange some things. It said it would spin off the Time Inc. unit, and restructuring and severance costs for that unit and elsewhere jumped up from $27 million a year ago to $80 million for the last quarter.

Considering the growing expense of the publishing unit and the lack of earnings, it might make sense for Time Warner to spin it off. The company still expects to meet its future guidance, and spinning it off could help it meet that goal.

Don’t Miss: Here’s a New Problem for Facebook: A Mass User Exodus.

More Articles About:   , , ,  

More from The Cheat Sheet