Time Warner posts lower quarterly profit due to impairment charges

NEW YORK, Wed May 2, 2012 – Time Warner Inc. on Wednesday said its revenue rose 4 percent from a year ago but impairment charges kept the media company from recording a higher profit in the first quarter.

Net income for the company, which owns a host of cable networks, premium TV service HBO, magazines and a movie studio, was $581 million, or 59 cents a share, compared with $681 million, or 59 cents a share, a year before. Time Warner bought back about 24 million shares from Jan. 1 through April 27, 2012.

Adjusted for impairment charges, including a $35 million charge related to the cancellation of the HBO series “Luck,” and a $52 million charge for shutting down a network in India, the company reported EPS of 67 cents per share. This came in 3 cents above Wall Street analysts’ average estimates.

Revenue rose 4.4 percent to $6.98 billion. Analysts were expecting revenue of $6.8 billion, according to Thomson Reuters I/B/E/S.

Its shares were flat in premarket trading.

Time Warner quarterly profit beats Wall Street forecasts

NEW YORK – Time Warner Inc. posted better-than-expected quarterly profit on Wednesday helped by its cable networks and the last installment of its Harry Potter movie franchise.

Shares rose around 5 percent in premarket trading, as the company also revealed an aggressive buyback strategy and an increase in its quarterly dividend.

Net profit rose to $773 million, or 76 cents a share, in the fourth quarter compared with $769 million, or 68 cents a share, a year ago.

On an adjusted basis, net income was 94 cents a share, ahead of average analysts’ forecast of 87 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 5 percent to $8.2 billion.

Subscription fees at its cable networks including HBO rose 5 percent to $3.5 billion driven mainly by a 5 percent increase in carriage fees paid by cable and satellite distributors.

But cable network advertising was up just 2 percent, with growth benefiting from international operations.

Advertising revenue at its Time Inc magazine publishing business was flat during the quarter but total revenue was down 1 percent to $1 billion.

Warner Bros revenues rose 7 percent to $3.9 billion, due mainly to stronger home entertainment, video games and new subscription video-on-demand deals with companies like Netflix Inc. and others.

The company forecast its full-year percentage growth rate in adjusted diluted net income per share to be in the low double digits from a base of $2.89 in 2011.

Time Warner also raised its quarterly cash dividend by 11 percent to $0.26 and announced a new $4 billion stock repurchase authorization by its board.

How businesses are evolving to accommodate changing communication needs

Kurt Fennell, Vice President of Product Management, Time Warner Cable Business Class

Communication needs are changing, and if businesses don’t keep up with new and emerging technologies, they could quickly be left in the dust by their competitors.

But with new technologies launching almost every day, it can often be difficult to know if the latest “next big thing” will actually help your business or just be a waste of money.

While there are many buzzed-about technologies being pitched to business owners, there are certain technologies that, if properly implemented and maintained, can really change the way a company carries on day-to-day operations and interacts with its customers.

“The business world is always changing and, with the proliferation of new technologies, that change is exacerbated,” says Kurt Fennell, vice president of product management for Time Warner Cable Business Class. “You don’t need every new technology that comes out, but there are things that can really make a difference for businesses of all sizes.”

Smart Business spoke with Fennell about current technology trends and what businesses should be paying attention to.

What current technology trends should business owners be most aware of?

There are three main technology trends right now that business owners would be wise to pay attention to:

  • The migration from TDM to IP. Businesses are looking for increased flexibility, scalability and value, and moving from time-division multiplexing (TDM) to Initiation Protocol (IP) applications helps them achieve that. Traditional services such as voice and conferencing can now be run over IP infrastructures, thus simplifying integration, enhancing communication and improving interactions.
  • An increase in mobility. With more companies employing mobile workers (people who work on the road) and teleworkers (people who work from home or some other remote location), there has been an increase in wireless applications. These applications allow employees to be more productive and more collaborative, regardless of where they may be working.
  • The emergence of managed services. With companies now able to get more bandwidth, flexibility and scalability due to the migration from TDM to IP, we’re seeing an increase in mobile managed services, such as storage, messaging and security.

How are the phone needs of businesses changing?

There are two key things that today’s businesses want:  the ability to self-manage and the ability to utilize more advanced features.

Self-managing means that a business has remote access to things such as call forwarding or hunt group configuration. A hunt group is the ability for a call to be routed to a station or person based on a set of rules. For example, you could have one telephone number for your sales department. If a call comes in to one of your phones and that salesperson can’t answer it, the hunt group will route the call to another salesperson who is available to take the call.

Advanced features include capabilities that allow your people to interact with customers in the way they want to — like having an auto attendant or Web access for live chats.

How are Virtual Private Networks (VPNs) changing the way employees do their jobs?

A VPN enables two locations to be connected together on the same network, so you can transparently and securely share information between those two locations, as if they were existing on one network. An example of this would be a company’s headquarters connecting to its branch offices, so that employees in the branches could access the file server, e-mail server and/or Internet connection of the headquarters.

Another aspect of a VPN is the ability to tie in mobile or remote workers to that network environment. Normally, this is done through software components that talk back to the VPN, connecting the remote or mobile workers to the network. This offers increased mobility and the ability to access company resources in a secure fashion. Secure remote capability is vital to doing business in today’s technological business world.

How does mobile Internet tie in to all of this?

With a large increase in mobility and the need for employees to be connected while on the go, applications such as productivity tools, messaging systems, video, etc., need to be always available and as fast as possible. Whether employees are connecting their laptops or smartphones with USB cards or Wi-Fi devices, they need to be able to access the applications they need to do their jobs. They also need to be able to connect and interact with colleagues and customers across the country. With the proliferation of 3G and now 4G networks, the mobile Internet allows workers to always be connected.

What would you say to business owners who don’t think they need all this new technology?

There are more traditional businesses that are not on the forefront of the adoption of technologies, and there are other more tech-savvy companies that always adopt technologies early on. There’s no hard-and-fast rule as to when to adopt a new technology, but it does make sense for a business to take advantage of those technologies that could improve productivity, enhance operations and save money.

If you have a business that has employees who need to collaborate in any way, or need to maintain a flexible work environment, you should look at what these technologies can do for you. Doing so can not only help you attract and retain the best and brightest employees, it can also help you remain competitive with other businesses that may have more resources than you do.

Kurt Fennell is the vice president of product management for Time Warner Cable Business Class. Contact a Time Warner Cable Business Class account consultant at (877) 407-4260 to discuss your communications needs.

How to manage technology during a move to minimize your company’s downtime

Shawn Sturgeon, Sales Engineer Manager, Time Warner Cable Business Class

Moving a business or opening a new office is a complex operation, and the ability to make a smooth IT transition is critical for reducing downtime, maintaining productivity and avoiding frustration for employees and clients.

“Moving is a formidable task,” says Shawn Sturgeon, sales engineer manager at Time Warner Cable Business Class. “A business can prepare by carefully planning how IT systems will be disconnected, relocated and installed at the new location. The key is to minimize the risk of downtime, which can be a serious financial and customer-relationship threat.”

Planning is critical to the success of a move, and Sturgeon emphasizes the importance of documenting IT processes and involving the right technology staff, from the chief information officer to network administrators. Ultimately, the key is to manage technology in such a way that customers will not notice the move, as their calls will continue to be answered and their needs tended to, their e-mails will arrive without error and the company will continue to provide service.

Smart Business spoke with Sturgeon about how to effectively manage technology when moving or opening new offices, from the initial planning to the decommissioning of old equipment.

What should businesses consider as they are planning a move to ensure a smooth IT transition?

Companies that keep detailed documentation of their IT systems and processes will find it easier to prepare for a move than those that do not put these integral business operations in writing. As a standard course of business, you should maintain a solid library of documentation that identifies what systems the company runs and what services the business uses.

What is included in the company’s IT inventory? What telephone lines exist, and what lines do these phones ring to when dialed? What contracts with external IT resources does the company hold? Who is responsible for managing specific technology roles, and what do those jobs include?

Proper documentation not only impacts your ability to manage technology during a move, but it can also reduce turnover in IT staff and ensure that the company maintains its IT intelligence if a key technology employee leaves the business. Because if your network administrator or IT manager leaves, does anyone know how to keep technology operations running? Your documentation will lay the groundwork for a moving plan.

While planning, begin to take inventory of what IT infrastructure you will move to the new location and what equipment you will retire. Will you need to buy more equipment? What services will you transfer, and will you need different or more IT services? What providers do you currently work with, and will you transfer this business when you move?

Begin planning as much in advance as possible, and be sure to communicate openly with technology staff and all employees so there is an understanding of what will happen on move day.

Who should be involved in the IT system moving process?

A key part of planning is identifying who is involved in the moving process and the role of each individual. In advance, identify who will be involved in the move from top level down to the workstation level with the people who will physically move the equipment and set it up.

Generally speaking, in large organizations, the chief information officer will head up the team, including an IT director down to telecom managers, IT managers and network administrators. In smaller firms, there might be a single person responsible for IT operations who oversees the move. Additionally, external resources will assist with the move in various capacities. These might include systems integrators that manage day-to-day operations of servers and applications, and service providers, such as telephone system vendors, Internet providers, wireless network providers, etc.

How can a technology move be executed to minimize downtime and frustration?

While there is certain to be some downtime during a move, the key is to minimize the time during which your business is disconnected. Identify, based on team members, how much time is required to set up each workstation. Then decide the best time to move, whether that is during a weekend or a weekday night.

Timing will likely depend on how quickly you can make the move and on the complexity of your move. Decide who will physically move the equipment — movers who specialize in IT relocation, or internal staff? Once equipment and service have arrived at the new location, who will put them in place and connect them, and how will they be tested to be sure all technology is operational?

How can a business securely decommission technology that isn’t going to make the move?

What will you do with old servers or systems you decide to no longer use after the move? You need a plan for how to decommission this equipment and how to ‘clean’ it to ensure that there is no business-critical information left on hard drives, servers and other hardware. There are agencies that specialize in disposing of IT equipment so be sure to ask them how they manage to do this securely. Along the same lines, determine what services must be disconnected at your old business location. Otherwise, you could end up paying double for services that were not cancelled.

Moving technology is a complex feat, but by involving a team of responsible individuals who understand their role in the moving process and employing outside vendors such as trusted service providers that understand your technology needs, you can make the process go smoothly and reduce costly downtime.

Shawn Sturgeon is a sales engineer manager for Time Warner Cable Business Class Midwest. Reach him at (330) 572-3913 or [email protected]

Time Warner profit beats analyst forecasts on ad sales

NEW YORK ― Time Warner Inc. posted better-than-expected quarterly results, helped by stronger advertising, and ratcheted up its full-year outlook.

For the second quarter, the parent of CNN, HBO, Time magazine and Warner Bros studios, reported adjusted earnings per share of 60 cents, ahead of the average analyst forecast of 56 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 10 percent to $7.03 billion, driven by a 9 percent rise in revenue at its cable networks unit, the company said on Wednesday. Cable’s advertising sales were boosted by sports programming including the NCAA basketball championship.

Warner Bros revenue rose 13 percent helped by growth in video games like Mortal Kombat 9 and LEGO Pirates of the Caribbean as well as DVD sales of “Harry Potter and the Deathly Hallows: Part 1.”

Publishing revenue at its publishing unit Time Inc rose 3 percent as subscription revenues rose.”These were pretty solid results in line with our expectations,” said Collins Stewart analyst Thomas Eagan. “The profit margins were hurt slightly by the NCAA costs but we expect them to widen in the current quarter.”

The New York-based company said it now expects its full-year percentage growth in net income per share to be “at least low teens.” Previously, the company had said profits would grow in the “low teens.”