Time Warner reported its quarterly earnings and investors were very happy with what they heard on the post-earnings conference call.
Jeff Bewkes, in his first call as Time Warner chief executive, presented his restructuring plan. Time Warner stock gained as much as 3 percent during the day, ending up about 2 percent. Bewkes seems eager to make the kind of dramatic changes that his predecessor, CEO Richard Parsons, was reluctant to make.
One major focus: cost cutting. Bewkes says he'll slash corporate costs by 15 percent. He also singled out Time Warner's New Line movie studio, saying they'll be carefully examining ways to cut costs.
(With another studio, Warner Bros., it's safe to say there are redundancies at best. My personal prediction is that Time Warner could totally shut New Line down when one of the two men who run it leaves).
Then there's the spinoff factor. Bewkes is planning to separate the "AOL Access" division, its consumer dialup and broadband business, which is in steep decline now that the company is switching away from subscriptions to an ad-supported model.
And Bewkes made no secret of his interest in potentially selling or spinning off AOL, basically saying that getting rid of AOL Access gives them more options in terms of what to do with the rest of the division. And for now, they're focusing on growing page views to sell ads. But they are working in an increasingly challening field: This morning, Time Warner reported that for this quarter, AOL's ad growth slowed again, to 10 percent--far lower than growth across the industry.
And then there's Time Warner Cable. Bewkes calls TWX's large holding of the cable company "less than optimal." Let's face it, there just isn't any synergy. The question Bewkes seems to be evaluating is whether it's worth more entirely alone. He said the company may have a plan by its next earnings report, in late April. (You can bet investors will demand some news by then, after planting that hint!)
The one division Bewkes didn't have any dramatic new plans for is its print publications unit. But he did say that he will make digital opportunities a priority across the company, and the magazines (including my former employer, Fortune, as well as Sports Illustrated) have great strong brands to exploit across its web platforms, a point he made on the call.
Now let's see if TWX stock holds up any of those gains on Thursday.
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