Time Warner (TWX) Shares Higher as Investors Like Close Up on Q4

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EPS Growth %: +38.2%

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Shares of Time Warner Inc. (NYSE: TWX) are trading up 4.67 percent Wednesday morning following the release fourth-quarter results for the quarter ended December 31st, 2011.

Revenue increased 5 percent from the year-ago quarter to $8.2 billion and topped the Street’s consensus of $8.06 billion.

Cost of revenue totaled $4.73 billion and rose 4 percent year over year. Selling, general and administrative expenses declined 3 percent from the prior fourth quarter to $1.66 billion.

Adjusted operating income rose 20 percent to $1.7 billion; adjusted operating income margin was 21 percent versus 18 percent in the 2010 quarter

Time Warner posted adjusted EPS of $0.94 for the quarter, compared to $0.67 for the same period in 2010. Diluted income per common share was $0.76 versus $0.68 in the prior-year quarter. The Street’s consensus was calling for earnings of $0.87 per share.

Time Warner ended the quarter and year with $3.48 billion in cash and cash equivalents, slightly less than the $3.66 billion it had when it stated the year.

The Board of Directors declared a regular quarterly dividend of $0.26 per share of Common Stock, payable in cash on March 15, 2012 to stockholders of record at the close of business on February 29, 2012. This dividend represents an 11 percent increase from its previous dividend and boosts the dividend to $1.04 from $0.94 on an annual basis.

Chairman and Chief Executive Officer Jeff Bewkes said: “In 2011, Time Warner had an ambitious agenda and we accomplished what we set out to do and more. We increased revenues 8%, Adjusted Operating Income 9%, and Adjusted EPS by 20%, which means we more than doubled Adjusted EPS over the past three years. That performance is a testament to the quality of our content, the strength of our brands, our creative and managerial talent and our competitive position. We also continued to roll out Content Everywhere versions of our products across all our divisions, harnessing technology to give consumers more ways, places and platforms on which to enjoy our great content. While investing aggressively to drive our long-term growth, we also returned $5.6 billion to our shareholders through dividends and share repurchases.”

Mr. Bewkes continued: “For 2012, we will execute against the same strategic priorities that have driven our success in recent years: We’re investing aggressively in programming, production and marketing. We’re further accelerating our Content Everywhere initiatives. We’re expanding our presence internationally in attractive territories. And we’re maintaining our strict focus on operating and capital efficiency. Reflecting both our confidence and our continued commitment to strong shareholder returns, today we also announced an increase in our dividend and a new $4 billion stock repurchase authorization.”

The Company expects its 2012 full-year percentage growth rate in adjusted diluted net income per common share to be in the low double digit range, compared to 2011 adjusted EPS of $2.89. The Street’s consensus is looking for $3.16 per share in earnings.

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