Time Warner earnings slightly ahead of estimates, with a buyback gift

Time Warner Inc. (NYSE: TWX) posted net income of $1.07 billion or $0.28 net EPS ($0.22 EPS outside of items and gains), on revenues of $10.98 billion. First Call had estimates pegged at $0.21 EPS and revenues of $11.1 billion. The company has also maintained guidance of $1.07 EPS for fiscal 2007.

On top of earnings, Time Warner has completed its previous $20 billion share buyback plan and has set a new $5 billion aside for share repurchases. Its prior plan retired over 20% of its outstanding shares.

Its AOL unit posted a 38% drop in revenues to about $1.3 billion, but that was expected because of the AOL subscriber model being changed to a free system. The good news is that its operating income in the unit was up 9% to $360 million.

Warner Bros. and New Line Cinema entertainment studios unit revenue fell 5% to $2.3 billion and the operating income fell 43% to $81 million. Its networks unit (HBO and Turner Broadcasting) saw revenue fall 1% to $2.6 billion, but income rose 4% to $634 million. The Time publishing segment saw revenue basically flat at $1.3 billion, but operating income was up almost 13% $256 million.

Unfortunately we have yet to see indication in pre-market trading, and DJIA futures are indicated down about 1% this morning. Shares of Time Warner Inc. have also not fared well since the stock market slide and shares have traded back under $20.00 for each of the last three days.


Jon Ogg is a partner at 24/7 Wall St.; he does not own securities in the companies he covers.