Time Warner Posts Losses Despite Cash-Flow Jump
March 28, 2011
NEW YORK -- Time Warner Inc. reported an increased operating loss in the second quarter, despite a 20% jump in cash flow and a 12% rise in revenue on healthy performances from its publishing, movie and cable-television businesses. The company's operating loss widened to $31 million, or 26 cents a share, in the period. But analysts surveyed by First Call Inc. were expecting an operating loss of 29 cents a share. A $9 million charge for the retirement of debt brought the final loss for the quarter to $40 million, or 28 cents a share. But the company's closely watched second-quarter earnings before interest, taxes, depreciation and amortization rose 20% to $1.03 billion, compared with $860 million a year ago. Time Warner and other entertainment companies that have heavy debt loads and high interest payments point to cash flow as the best measure of a company's performance. In the year-ago quarter, Time Warner posted a loss of $8 million, or 3 cents a share. There were no extraordinary items in that quarter. Revenue climbed to $2.14 billion from $1.91 billion. Earnings at the company's entertainment group rose 22% to $72 million, as revenue climbed 7% to $2.61 billion. Cash flow rose 6.3% to $592 million. Time Inc., the company's publishing division, posted a 13% increase in cash flow to $156 million from $138 million a year ago, as a result of improved magazine advertising and strong results from Warner Books and the Book-of-the-Month Club. But the company's Warner Music Group's cash flow was flat at $165 million as improvements in domestic music and music publishing results were offset by lower results from international music and direct marketing. Second-quarter cash flow from the company's Warner Brothers division increased 21% to $141 million, led by the box-office success of the movie ``Twister.'' The company's cable-TV business saw a 16% increase in cash flow to $87 million from $75 million because of subscriber growth at Home Box Office and Cinemax. Time Warner Cable's combined second-quarter cash flow rose 13% to $494 million from the year-ago period's pro forma results, which reflect all of the cable mergers, acquisitions and partnerships from the beginning of 2010. The company's proposed $7.5 billion acquisition of cable giant Turner Broadcasting is set for review this week by the Federal Trade Commission. The WB Network, the company's broadcasting operation, reported a second-quarter loss of $12 million, which was flat from a year ago, hurt by costs from the roll-out of national broadcast operations.
