Time Warner reported Wednesday that its second quarter net income rose 10% to $850 million as the robust performance of HBO and its cable TV networks helped offset its film studio’s falling revenue. Shares of Time Warner shed 12.9% Wednesday to $74.24, continuing the stock’s fall from after-hours trading Tuesday that was triggered by Fox’s announcement of its bid withdrawal.
Adjusted earnings per share of 98 cents for the quarter beat analysts’ estimate of 84 cents.The New York-based media company, which had received a bid from Rupert Murdoch’s 21st Century Fox earlier this year only to see Fox withdraw the bid Tuesday, told analysts that its business for the rest of the year is on track to meet internal estimates. It reaffirmed previous guidance for 2014, saying it expected adjusted earnings per share to grow “in the low teens” off a base of $3.51.
It’s been an eventful quarter for Time Warner. While fending off Murdoch’s interest through press statements and a rare video by CEO Jeff Bewkes, the company also completed spinning off its magazine business — Time Inc. — on June 6, a move to shield its more profitable TV and film business lines from the decline in print advertising. Restructuring and severance costs related to the spinoff totaled $17 million for the quarter.