Time Warner Revenues Up on Cable Acquisitions


Time Warner Inc. (TWX), parent of Time Warner Cable, saw revenues rise in the second quarter and announced a $5 billion stock buyback program.

 Total revenues for TWX were up 6% in Q2 2007 to $11 billion from $10.4 billion in the same period a year ago, led by growth in the cable segment.

 Operating income was $1.9 billion in the quarter from $1.7 billion in Q2 2006 with increases in AOL, cable, networks and publishing.

 Net income was $1.067 billion or $0.28 per share from $1.014 billion or $0.24 per share a year ago.

 For the first six months ended June 30, the company's cash from operations was $3.1 billion and free cash flow was $2 billion.

 The company also announced a $5 billion stock repurchase program. In its previous program, which ended with the second quarter, the company repurchased approximately 1.1 billion shares of common stock, or about 23% of the total outstanding shares at the program's inception, for approximately $20 billion.

 The acquired systems from bankrupt Adelphia Communications and the consolidation of assets from the liquidated joint venture with Comcast, Texas and Kansas City Cable Partners, were the primary catalysts in surging revenues in Time Warner Cable's (TWC) segments.

 Overall Q2 revenues rose 59% from the same period a year ago to $4 billion. Subscription revenues increased by the same margin to $3.8 billion with the additions as did video revenues to $2.6 billion. High-speed data revenues increased 54% to $924 million. Voice revenues were up 75% to $285 million on strong digital phone subscriber growth. Advertising revenues increased 70% to $226 million.

 Operating income before depreciation and amortization (OIBDA) grew 52% from a year ago to $1.4 billion, fueled by the higher revenue growth. That was partially offset by operating expense increases, particularly in video programming which was up 66% to $882 million due to additions from the acquired systems.

 TWC's operating income increased 31% from Q2 2006 to $711 million but was partially offset by a higher depreciation expense as a result of the acquired systems.

 Net income in the second quarter was $272 million, or $0.28 per diluted share, compared to $293 million, or $0.29 per diluted share in Q2 2006. The 2006 figure is $260 million or $0.26 per share before discontinued operations.

 Cash provided by operating activities in the quarter was $1.2 billion, up from $759 million in the quarter a year ago and free cash flow was $367 million from $164 million in the quarter.

 The company reaffirmed its full-year 2007 outlook, expecting growth rates in the mid- to high-thirties for revenue and OIBDA. Additionally, the company expects full-year free cash flow to be in the $800 million to $1 billion range.