Time Warner Enjoys Record Cash Flow
As a result, net losses at the entertainment and media group fell to $91 million, compared with $144 million, although the loss per common share increased from 41 cents to 43 cents because of almost quadrupled dividend payments to preferred stockholders.
Gerald Levin, chairman, catalogued a series of summer successes and said he expected growth to continue following the merger with Turner Broadcasting System, completed last week.
Earnings data released Wednesday excluded TBS. The group, which has not turned a profit since 1990 when Time Inc took over Warner, presents its results in terms of cash flow or earnings before interest, taxes, depreciation and amortisation associated with the merger as the best guide to its fortunes.
On this basis, earnings from films rose 13 per cent to $146 million, cable improved 31 per cent to $512 million, while music divisions, which took heavy restructuring charges last time, were unchanged at $143 million.
Publishing showed a 15 per cent advance to $99 million. Underpinning the improvements, revenues rose 12 per cent to $4.9 billion.
The company, which recently told investors it planned to slim, cut costs, and is expected to restructure the capital-intensive cable TV systems responsible for much of its $17.5 billion debts, has already started work on its music division.
Following cuts at lesser labels last year, Atlantic Records now faces a 13 per cent cut in its workforce.
Wednesdays results, which followed a 20 per cent cash flow surge in the second quarter, and raised cash flow for the first nine months 27 per cent to $2.9 billion, included the fruits of Twister, a film which has drawn almost $250 million at the box office and is expected to continue contributing foreign revenues and income from home video sales.
Two following Warner releases, Eraser and A Time to Kill, have also sold more than $100 million-worth of tickets each to qualify as blockbusters.
At Time Inc, advertising revenues from a special daily Olympics edition of Sports Illustrated enhanced cash flow growth in the publishing division which was already above 10 per cent in the second quarter.