TW spins out cable, income slides
May 1, 2008
Announcing Q1 results Time Warner's CEO Jeff Bewkes finally confirmed the company's intention to spin off TE's 84 per cent stake in Time Warner Cable, the country's second-largest operator. But no details were immediately given on how the Time Warner Cable stock would be separated.
“We've decided that a complete structural separation of Time Warner Cable, under the right circumstances, is in the best interests of both companies' shareholders,” Bewkes said. “We're working hard on an agreement with Time Warner Cable, which we expect to finalise soon. At the same time, we'll continue to pursue the rest of our aggressive agenda that we believe will deliver increasing value to our shareholders.” The move is expected release approximately $4 billion that will be returned to shareholders.
Meanwhile Time Warner for the quarter ended March 31st, net income slid 1 per cent when excluding $670 million in one-time gains during the year-ago period from proceeds from asset sales. Revenues rose 2.1 per cent to $11.42 billion from $11.18 billion.
“Our results this quarter – particularly the underlying operating strength at our cable, networks and filmed-entertainment businesses – gave us the confidence to reaffirm our full-year business outlook,” Bewkes said. The current quarter was depressed by a one-time $116 million restructuring charge related to consolidating its New Line Cinema movie studio into Warner Bros.