NEW YORK (AP) - Time Warner Inc. said Wednesday that net income grew 51 percent in the last three months of 2012 even as revenue was largely unchanged. Rising fees from cable and satellite companies and higher ad revenue at the TV networks offset revenue declines at the movie studio and magazine businesses.
Its shares jumped to its highest level in more than a decade in morning trading.
The television business drove the quarter's performance as revenue there grew 5 percent, offsetting declines elsewhere. The Warner Bros. studio business had a weaker release lineup in the most recent quarter, though it managed to report an operating profit with expense reductions. The Time Inc. magazine business, the smallest of the three, has announced layoffs to reflect reduced demand for print editions.
Time Warner said net income was $1.17 billion, or $1.21 a share, for the fourth quarter, up from $773 million, or 76 cents a share, a year earlier.
Adjusted for one-time items, earnings came to $1.17 per share. That beat the $1.10 per share that analysts surveyed by FactSet expected.
Revenue edged down to $8.16 billion from $8.19 billion a year ago. Analysts expected revenue of $8.22 billion.
Time Warner also said Wednesday that it is raising its quarterly dividend by 11 percent to 28.75 cents per share. It's payable March 15 to shareholders of record as of Feb. 28. It also said the company's board has authorized $4 billion in stock buybacks, which tend to increase the stock price for remaining shareholders. The new authorization replaces prior buyback plans, which resulted in $3.5 billion in buybacks from Jan. 1, 2012, to Feb. 1, 2013.
Time Warner's stock increased $2.34, or 4.7 percent, to $52.30 in morning trading after rising as high as $52.55 earlier, its highest level since February 2002.
Time Warner is estimating $60 million in charges this year related to an announced layoff of about 500 employees at the magazine business, or about 6 percent of the division's global staff of 8,000. The company has been trying to cut costs to reflect decreases in revenue and the need to invest in more ways to deliver content on multiple platforms and devices.
In the fourth quarter, revenue at Time Warner's TV business grew 5 percent to $3.7 billion.
That business has gotten stronger in recent years as U.S. cable and satellite operators have been paying more to carry channels such as TNT, TBS and CNN on their lineups. The company also had more U.S. subscribers for the HBO premium channels and saw growth internationally across the TV business, despite unfavorable currency-exchange rates. Revenue from those distributor and subscription fees rose 7 percent.
Ad revenue at the networks increased 3 percent because of better rates, more NBA games shown on Time Warner channels and increased viewership at CNN during the presidential election season. Licensing and other content revenue fell 9 percent mostly because of a shutdown of TNT operations in Turkey.
At the Warner Bros. studio business, revenue fell 4 percent to $3.7 billion, largely because of a weaker lineup. The same quarter in 2011 had revenue from the home release of the final Harry Potter movie and the video game "Batman: Arkham City." Theatrical releases of the first "Hobbit" movie and "Argo" in most recent quarter weren't enough to offset those declines. But operating income increased 29 percent to $552 million partly because of lower marketing and other expenses from the timing of movie releases.
The Time Inc. magazine business saw revenue fall 7 percent to $967 million as ad revenue fell and the company no longer had money from a school fundraising business sold in early 2012. Subscription revenue was flat.
The company expects 2013 adjusted earnings to be up in the low double-digit percentage, an estimate that reflects the anticipated restructuring charges at Time Inc. It was $3.28 per share in 2013, meaning the projected range is $3.61 to $3.77. Analysts had expected earnings of $3.66 per share for 2013.
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