When a quarter is as rough as Q408 was for Time Warner (NYSE: TWX), anything decent is going to look pretty good in comparison. Comparing last year’s $16 billion loss with its massive writedowns to the Q409 net income of $627 million broke the calculator we use for our charts but what really matters for this first earnings period post-AOL (NYSE: AOL) is that it’s positive and the $0.55 earnings per share the analyst estimates by three cents, compared with a loss of $5.46 per share in Q408. (Time Warner rewarded shareholders by raising the dividend $0.13 and tripling its stock buyback program to $3 billion.)
CEO Jeff Bewkes has a content-based company now as Time Warner heads into its first full year without AOL and Time Warner — and, unless the unexpected kicks in again, a year where the results are more about the company, less about the economy. What does the foundation look like?
— Publishing takes AOL’s place as the drag on the company but even its numbers look good compared to last year, with operating income of $79 million compared to the loss of $7.1 billion in Q408 after the $7 billion impairment charge. The real numbers: Revenue dropped 13 percent to $1.1 billion including decreases in advertising (12 percent) and subscription (6 percent). Restructuring charges in Q409 totaled $92 million, compared with $130 million in the same quarter last year. On the plus side, subscriptions only dropped 6 percent.
— Networks accounted for a $104million writedown for the rights to Without A Trace, acquired from sibling Warner Bros. (B&C has the details.) As for actual operating results, subscription revenue rose 11 percent while advertising dropped a mere 4 percent for Q409. But “content” revenues were down 22 percent.
— Filmed entertainment jumped 7 percent, aided by the Q4 success of The Blind Side and Sherlock Holmes and Harry Potter DVD sales. Also contributing: the segment’s games, including LEGO Indiana Jones 2: The Adventure Continues and LEGO Rock Band.