Time Warner said today that it expects profit growth to match or beat Wall Street estimates, after reporting quarterly earnings that reflected increases in broadband and phone subscribers and sales of 'Harry Potter' and '300' films.
The media conglomerate, which owns AOL, CNN and Time, forecast adjusted operating income before depreciation and amortization to rise 7-9% this year, which could exceed Wall Street's forecast of 7% growth.
While profit growth is sharply lower than 2007's 17% rise, that is largely due to Time Warner Cable's acquisition of Adelphia cable systems, which closed in mid-2006. Excluding gains from that deal, 2007 growth would have been 8%.
Newly appointed Chief Executive Jeffrey Bewkes is expected today to discuss a plan to spin off the company's ownership of Time Warner Cable.
Investors are also looking for any clues on whether Time Warner should keep or spin off AOL, which was restructured last year to focus on being a one-stop shop for online advertising.
Pressure on Time Warner to do something about AOL have accelerated after Microsoft's $45 billion bid last Friday to buy Yahoo. A deal, which would eliminate two potential partners or buyers of AOL but raise the valuations of online advertising assets, will redraw the Internet advertising landscape and consolidate power between Microsoft and Google.
Time Warner said fourth-quarter profit fell to $1 billion, or 28 cents per share, from $1.8 billion, or 44 cents per share, a year earlier, when it logged a big gain from sales of AOL units and other items. Revenue rose 2% to $12.64 billion, in line with Street forecasts.
