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Time Warner on Wednesday confirmed plans to spin off its 84 per cent stake in Time Warner Cable, as the US media group delivered first-quarter earnings that narrowly missed Wall Street expectations because of falling sales at its AOL internet division.
Jeff Bewkes, chief executive since January, said however that “underlying operating strength” in its cable, networks and film businesses during the quarter “gave us the confidence to reaffirm our full-year business outlook.”
The group continues to expect 2008 full-year growth in adjusted operating income before depreciation and amortisation to be between 7 and 9 per cent.
Although expected tax benefits from the Economic Stimulus Act will boost free cash flow to “at or above” $4.5bn, Time Warner maintained its target for earnings from continuing operations, which it expects to fall in the range of $1.07 to $1.11 per share.
“We’ve decided that a complete structural separation of Time Warner Cable, under the right circumstances, is in the best interests of both companies’ shareholders,” Mr Bewkes said.
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