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If your mother owns company stock, is it time to warn her?
Time Warner Inc. has reported financial results for its first quarter ended March 31, 2013.
Chairman and Chief Executive Officer Jeff Bewkes said that the media giant was “off to a strong start in 2013, making us even more confident in our full-year outlook. Our Adjusted Operating Income in the first quarter increased 7% to $1.4 billion, up 10% excluding Publishing, and Adjusted EPS climbed 22%. These results reflect the ongoing strength of our content, particularly in television.
At Turner, the NCAA Division I Men’s Basketball tournament was the most watched March Madness in almost two decades. And we’re seeing good momentum across most of Turner’s networks, including TBS, which was the #1 ad-supported cable network in primetime across adults 18-34 and 18-49 during the quarter. At Warner Bros., we had another very strong TV season, including having four of the top six comedies on TV and both of the breakout new dramas of this season, Revolution and The Following. And HBO continues to go from strength to strength, powered by hits like Game of Thrones, which is on track this season to become the most-watched series on HBO since The Sopranos.”
Mr. Bewkes further argued that during the quarter the company “announced our plans to spin off Time Inc. into an independent publicly-traded company, which we expect to complete by the end of the year. As we said when we announced the spin-off in March, we believe this is the best structure for both Time Inc. and Time Warner, and expect this step will create additional value for our stockholders. Underscoring our commitment to stockholder returns, so far this year we’ve repurchased almost $870 million of our stock and paid out over $270 million in dividends.”
Company Results
Revenues of $6.9 billion were essentially flat compared to the year-ago quarter, as growth at the Networks segment was offset by declines at the Film and TV Entertainment and Publishing segments. Adjusted Operating Income grew 7% to $1.4 billion due to increases at the Networks and Film and TV Entertainment segments, offset in part by declines at the Publishing segment. Adjusted Operating Income margins were 21% and 19% in the first quarter of 2013 and 2012, respectively. Operating Income increased 13% to $1.4 billion, while Operating Income margin was 20% compared to 18% in the prior year quarter.
In the first quarter, the Company posted Adjusted Diluted Net Income per Common Share (“Adjusted EPS”) of $0.82 versus $0.67 for the year-ago quarter. Diluted Income per Common Share was $0.75 for the three months ended March 31, 2013 compared to $0.59 for last year’s first quarter.
Excluding Publishing, Revenues were flat, Adjusted Operating Income rose 10% and Operating Income grew 13%.
For the first three months of 2013, Cash Provided by Operations reached $729 million and Free Cash Flow totaled $935 million. As of March 31, 2013, Net Debt was $16.9 billion, down from $17.0 billion at the end of 2012, due to the generation of Free Cash Flow and proceeds from the exercise of stock options, offset in part by cash used for share repurchases and dividends.
Stock Repurchase Program Update
In January 2013, the Company’s Board of Directors authorized a total of $4 billion in share repurchases beginning January 1, 2013, which replaced the amount remaining under the prior authorization.
From January 1, 2013 through April 26, 2013, the Company repurchased approximately 16 million shares of common stock for approximately $868 million.
