Time Warner Talks Up Profit Growth in Standalone PitchDoni Bloomfield
Time Warner Inc. Chief Executive Officer Jeff Bewkes touted his slimmed-down media company’s plan to double earnings by 2018 as he pitched investors on the company’s standalone value.
Just months after rejecting a takeover offer from 21st Century Fox Inc., Bewkes forecast earnings growth that exceeded the average of analysts’ estimates. He also said Time Warner is focusing on collaborating more across units such as Turner Broadcasting, Warner Bros. and HBO, and working to capitalize on new methods of delivering video content.
HBO GO is “both enhancing the value of the ecosystem and it’s opening up growth opportunities for HBO outside the traditional ecosystem,” Bewkes said today at the company’s investor meeting in New York. “This theme of investing both inside and outside the traditional ecosystem is one you’re going to hear today from all our divisions.”
Bewkes, 62, is under pressure to prove that his company can deliver better returns on its own after spurning a $75 billion takeover offer from Rupert Murdoch’s Fox. So far, the New York-based company has been cutting jobs to reduce costs, starting a marketing push for its HBO premium network and betting that increased spending on sports rights will help retain viewers on cable channels like TNT.
It’s all part of Bewkes’ efforts to prove that he can find the next wave of growth for Time Warner after his strategy since taking over in 2008 has largely consisted of spinning off assets -- Time Warner Cable Inc., AOL Inc. and most recently the Time Inc. publishing division.
Today, Bewkes said adjusted earnings will be close to $6 a share by 2016 and more than $8 a share by 2018. Analysts expect profit of $5.40 in 2016 and $7.02 in 2018, according to the average of estimates compiled by Bloomberg.
The shares rose 4.1 percent to $73.55 at 10:07 a.m. New York time. The stock earlier rose as much as 4.3 percent for the biggest intraday gain since July 17. Murdoch’s bid, which he withdrew in August, had valued the company at $85 a share.