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Time Warner Profit Rises on Adelphia Cable Systems

Jan 31, 2007  •  Post A Comment

Bolstered by its acquisition of cable television systems from Adelphia Communications, Time Warner reported a jump in earning for the fourth-quarter and the full year of 2006.

“We expect 2007 to be another superb year for Time Warner,” said Dick Parson, chairman and CEO. The company told investors it expects its adjusted operating income before depreciation and amortization to grow at a rate in the mid to high teens.

In the fourth quarter, net income rose 39 percent to $1.8 billion.

With the Adelphia acquisition, revenues of Time Warner’s cable division rose 58 percent in the fourth quarter and operating income increased 26 percent. The company said that about 10 percent of its customers took the triple play combination of cable television, high-speed Internet and phone service from Time Warner Cable. The company’s count of phone customers rose 11 percent.

Sales rose 10 percent at Time Warner’s network group, which includes Turner Broadcasting and HBO, and operating income at the unit grew 11 percent.

AOL’s fourth quarter revenue declined 8 percent to $1.9 billion as the company moves away from a subscription-based business to a free, advertising-supported model. The unit’s profit rose to $913 million from $170 million because of the sale of AOL’s Internet access business in the U.K. and France. The online business’ annual revenue fell to $1.86 billion from $2.01 billion.

For the year at Time Warner, earnings more than doubled to $6.55 billion from $2.67 billion in 2005, driven by big gains in the cable and networks business segments. Revenue rose 4 percent to $44.2 billion.

Time Warner stock fell 16 cent to $21.88 in mid-day trading.

(Editor: Baumann)