Time Warner continues to wrestle with the legacy of past accounting scandals, setting aside $3 billion in reserves to settle shareholder lawsuits.
The company said it has reached a tentative settlement with the major plaintiffs, part of the wave of suits filed over the company’s overstatement of online revenues.
But as the company puts past problems behind it, the present looks problematic.
Time Warner posted another weak quarter, with the stength of its cable systems unit was offset by weak movie, magazine and network performance. Companywide, revenues dipped 1% to $10.7 billion.
The cable division was mostly good news.
Sales increased 11% to $2.4 billion, while operating cash flow rose 10%. High-speed internet sales increased 21% and digital cable sales jumped 19%.
By contrast, the company’s TV networks unit was nothing to write home about.
Total revenues increased just 5% to $2.5 billion. At the same time, operating income dropped 5%, largely because of higher programming spending on original producitons and sports rights.
The company didn’t detail the performance of HBO, so its unclear how the pay network’s audience slump is affecting its financial performance.
In an effort to prop up its stock price, Time Warner became the latest media company to set a new share buyback program, saying it will spend $5 billion purchasing its own shares in the open market.