UPDATE, 6:45 AM: A company that boasts about its ability to produce drama just let down its audience: Time Warner CEO Jeff Bewkes told analysts that he’s “not going to comment on the proposal from 21st Century Fox and its withdrawal.” He added, though, that Time Warner is “committed to delivering substantial and sustainable returns.” His stock is down 11.2% in early trading after Rupert Murdoch took back his $80B offer, which Time Warner had already rejected. Bewkes says that he’ll have an Investor Day event in the fall where execs can show how they plan to keep profits growing.
Although execs wouldn’t discuss Fox, they spoke broadly about Time Warner’s view of mergers and acquisitions. “We always look at M&A opportunities as they present themselves,” CFO Howard Averill said, adding that “we don’t need to do anything.” Bewkes says the company has “leading scale in all of our businesses” including movie and TV production and distribution. “We’re not lacking something that we need.” Meanwhile “there are benefits and risks to making any kind of combination” including interruption of plans and regulatory scrutiny.
PREVIOUS, 4:20 AM: This might catch the eye of Time Warner investors this morning after learning last night that Rupert Murdoch has withdrawn his $80B offer for the owner of Warner Bros, HBO and Turner networks: Time Warner says that its board in June added $5B to its share repurchase effort, bringing the total now to $6.5B. The company’s shares still are tracking -11% at about $75.60 in pre-market trading as people wait to hear CEO Jeff Bewkes explain why he stiff-armed Fox, which offered $85 a share in cash in stock. Murdoch last night upped his share repurchases by $6B.
Time Warner’s new Q2 earnings report provides mixed indications that shareholders will still do better with Bewkes’ growth plans. The company generated $850M in net income, +10.3% vs the period last year, on revenues of $6.79B, +2.7%. The top line missed the Street’s expectation for $6.87B. But adjusted earnings at 98 cents a share beat forecasts for 84 cents. (more…)