I think no one ever post here because TWX is "a reasonably safe long term stock." I like a quiet thread more than one with 50 post a day explaining why the stock will rise or fall 50% over night. (i have some of those stocks too<G>)
Anyway, here is one of the articles about today's report:
Time Warner Has Break-Even 1st-Qtr on Cable, Film (Update3)
Bloomberg News
April 14, 1999, 9:48 a.m. PT
Time Warner Has Break-Even 1st-Qtr on Cable, Film (Update3)
(Adds analyst comment in 19th paragraph. Updates shares.)
New York, April 14 (Bloomberg) -- Time Warner Inc., the
world's No. 1 media company, had better-than-expected operating
results in the first quarter, breaking even on strong growth at
its cable-television networks and Warner Bros. film studio.
The company broke even on a per-share basis, beating the
average analyst estimate of a four-cent loss, according to First
Call Corp. Net income, including a gain, was $138 million, or 10
cents, before the payment of preferred dividends. It had a loss
of $62 million, or 12 cents, in the year-earlier period.
Time Warner's cable networks led the growth as Home Box
Office, TBS and TNT sold more advertising and gained subscribers.
The Warner Bros. studio, which struggled last year with several
money-losing films, benefited from strong ticket sales for
''Analyze This'' and ''You've Got Mail.'' The music division
continues to gain market share with top-selling artists such as
Cher, Madonna and others.
''Their businesses are flourishing and being managed for
maximum profit production,'' said Fred Moran, an analyst at ING
Baring Furman Selz.
Revenue from New York-based Time Warner and its partnership
with MediaOne Group Inc. rose 2.4 percent to $6.2 billion from
$6.05 billion.
Operating cash flow, which Time Warner defines as earnings
before interest, taxes and amortization, rose 47 percent to $1.3
billion from $852 million. Analysts and investors use cash flow
to analyze the performance of indebted companies such as Time
Warner because it focuses on how the underlying businesses are
doing.
Time Warner, which has borrowed heavily, in part to finance
its cable operations, ended last year with about $16.5 billion of
debt.
Cable Prospects
Shares of Time Warner rose 3/4 to 77 3/4 in midday trading.
The shares have doubled in the past year.
The company said some cable-related transactions last year,
including the formation of a joint venture in Texas to serve 1.1
million subscribers, affected the results. It also had a pretax
gain of about $215 million, or 10 cents a share, for the early
termination of a video distribution agreement. Including those,
revenue rose 7 percent and cash flow 24 percent.
This is the 10th quarter in a row that Time Warner has met
or exceeded forecasts. Last year, Time Warner had its best year
since Chairman Gerald Levin took charge of the company in 1992.
And many analysts don't see the growth slowing as the music
business continues its comeback and its cable-TV business
benefits from telephone, digital TV and other new services.
Levin said in a statement that the first-quarter results put
the company on track for a record year.
The company had record results in its Time Inc. publishing
division, Turner Cable Networks, its TBS film division, Warner
Bros., HBO and cable systems.
Subscription Revenue
Time Warner's TBS cable network division had a 20 percent
rise in cash flow, increasing to $184 million. Growth at channels
such as TNT, or Turner Network Television, and the Cartoon
Network, was driven by strong advertising and subscription
increases, the company said.
The HBO unit increased cash flow by to $125 million because
of higher subscription revenues from the businesses' main
channels -- HBO and Cinemax.
Cash flow at the company's publishing business, Time Inc.,
rose 11 percent to a record $94 million from $85 million. Strong
demand for advertising at magazines -- particularly at Time,
Fortune, People, In Style and Entertainment Weekly -- fueled the
increase. Still, American Family Enterprises Inc., a direct-
marketing company of which Time Inc. owns 50 percent, showed
weakness.
Recorded Music
Time Warner's music division -- Warner Music Group -- had
cash flow of $102 million, up 10 percent, from $93 million. The
division continues to rebound from a couple years of weakness as
sales improve worldwide.
The Warner Bros. movie business has also begun to recover
from several money-losing pictures last year, when it finished in
third place in domestic market share behind Walt Disney Co. and
Viacom Inc.'s Paramount Pictures. Now, hits such as ''Analyze
This'' and ''The Matrix'' have put the studio back on top with a
leading 17.5 percent of the market.
Cash flow at Warner Bros., which includes film and TV
business, rose to $346 million from $119 million. Excluding the
pretax gain of $215 million, cash flow increased 10 percent.
''They have a good period right now. It will be a little
less exciting for a while until the summer hits, when they have a
pretty good lineup'' with ''Wild Wild West'' and ''Eyes Wide
Shut, said Scott Davis, an analyst at Schroder & Co. with an
''outperform'' rating on the company's shares.
Time Warner owns Warner Bros. in a partnership with
MediaOne, which has a 25.5 percent interest. Most of Time
Warner's cable systems are also held in that partnership, called
Time Warner Entertainment.
The cable systems had cash flow of $403 million, up 5.6
percent on stronger adverting and pay-per-view revenue. The
company has 12.9 million subscribers.
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