Time Warner today posted an 80 per cent increase in profits, boosted its share buyback plan to $12.5 billion from $5 billion, and confirmed it was in talks over its AOL internet arm with "a number of strategic partners".
It had already been a busy week for the media conglomerate. Separately, the company today said its Time Inc unit had received a writ from a federal grand jury in connection with an investigation into magazine circulation.
On Monday, Steve Case, the former chief executive of AOL and architect of its disastrous merger with Time Warner, stepped down from the board to avoid a conflict of interest with his latest venture.
Time Warner said third-quarter net income rose to $897 million, from $499 million a year earlier, beating analysts' forecasts. Revenues advanced to $10.54 billion from $9.94 billion driven by a strong performance from its cable unit.
"In short, our company is strong and getting stronger," Dick Parsons, chairman and chief executive officer, said.
The company also said that its board had authorised a total of $12.5 billion to buy back stock over the next 21 months.
Carl Icahn, the veteran investor, has been pressing the company to restructure, cut costs and return value to shareholders. Early last month, he called on Time Warner to buy back $20 billion of shares.
In a conference call with analysts today, Mr Parsons said that discussions with third parties over AOL had covered "a range of potential strategic relationships and transactions".
However, he added that he did not yet know if the talks, "will result in any transaction or what form any transaction would take."
It has widely been reported that Google, Comcast and Microsoft have all shown interest in AOL, which merged with Time Warner at the height of the dot.com boom.
AOL Time Warner was worth around $290 billion when the merger announcement was made in January 2000. Within two years the company’s market value had plunged to less than $140 billion. Today it is worth around $85 million.
The coupling of AOL and Time Warner is now regarded as one of the worst deals ever forged. Nevertheless, the AOL division represents one of the last large opportunities to make a "land grab" in the increasingly lucrative online sector.
Across Time Warner, adjusted operating profit before depreciation and amortisation rose 9 per cent to $2.6 billion, reflecting increases of 21 per cent at networks and cable, 6.9 per cent at the AOL Internet unit and 9.1 per cent in publishing. Filmed entertainment fell 30 per cent because of "difficult prior-year comparisons," Time Warner said.
For the year, the company expects adjusted operating profit to rise by a percentage in the high single digits from 2004's $9.9 billion. Revenue should rise and profit margins should widen, Time Warner said.
In September, Time Warner said it expected its adjusted earnings for the year to range from 74 to 75 cents a share.
