Boston, MA 02/05/2014 (wallstreetpr) –Time warner Inc. (NYSE:TWXAMIDST) saw a drop of its net income by a high of 12% despite recording impressive revenues growth of 5% from $8.16billion to a high of $8.56 billion, this was an improvement compared to consensus estimates of $8.39 billion. Higher programing costs and lower magazine sales have been seen as the main cause of the decline in net income. There was also a slight drop of in quarterly income which dropped to lows of $983 million compared to years’ ago of $1.1 billion.
Time Warner to spin off its publishing unit
The media company is planning to spin off its publishing unit and focus more on the Television sector which is seen as a viable solution capable of providing good returns on investments. Excluding some items, the company’s earnings per share stood at $1.17 a share against analysts’ estimates of $1.15. time Warner CEO Jeffrey Bewkes has opted to focus more company growth strategy on the cable content which accounts for up to 70% of the company total income. The publishing unit has been the worst performing segment thus the reason for the imminent disposal. There have been rumors that the publishing unit could be merged with Meredith Corp. While waiting to shell out the publishing unit, Time warner Inc. (NYSE:TWXAMIDST) has laid off up to 500 employees.
TWX financial analysis
Time warner Inc. (NYSE:TWXAMIDST) net revenue for the fourth quarter was a flat with 6% drop in circulation in the end canceling out with 2% increase in ad revenue and 6% increase in other revenue. The acquisition of American Express publishing has been seen as the reason behind the increase in quarterly revenues. Excluding American Express publishing unit, Time warner’s subscription revenues would have slumped by as high of 10% with ad revenue dropping by 7%. Warner Bros which is the largest business unit grew by 7% in the quarter to record total revenues of $4 billion.
The company operating income dropped by 14% to lows of $173 million attributed to the decline of magazines outside American Express publishing. Time Warner stock have been performing exemplary well in the market having climbed by 25% in the past year alone. TWX subscription succumbed to the quarter’s pressure to fall by 6% with advertising sales increasing by 6% in the same quarter. Full year saw Time warner Inc. (NYSE:TWXAMIDST)’s net income hitting highs of $3.69 billion, an increase of 26%.
