Bucking Forecasts, Time Warner Posts a Profit: $33 Million

Time Warner Inc. reported an unexpected fourth-quarter profit Tuesday on robust gains in film, programming, cable and music.

Net income for the media and entertainment company rose to $33 million, or 1 cent a share, defying forecasts for a loss of 2 cents a share. A year ago, the company earned $12 million, or 2 cents a share. Per-share earnings reflect preferred stock dividend payments.

The results and a forecast for double-digit increases in operating cash flow this year are a significant triumph for Chairman Gerald Levin, who is under pressure to complete the $7.2-billion purchase of Turner Broadcasting System Inc. and settle a lawsuit about the purchase filed by cable partner US West Communications Inc.

Including Time Warner Entertainment, which holds the film, broadcasting and Home Box Office businesses, revenue rose 12%, to $5.12 billion from $4.59 billion. At Time Warner alone, which holds the publishing and music businesses, revenue rose 3.1%, to $2.36 billion from $2.29 billion.

Most of Time Warner’s major businesses showed strong increases in operating cash flow, with a companywide gain of 9% before acquisitions.

Time Warner shares jumped $2 to $43.50 in New York Stock Exchange trading Tuesday.

Meanwhile on Monday, discussions were underway between senior Time Warner and US West executives on settling US West’s suit, Time Warner executives said. That was a surprise to analysts because Time Warner said recently that it wasn’t negotiating with the Englewood, Colo.-based telephone company.

Time Warner said settling the suit is a top priority. The companies are scheduled to go to trial March 13, but analysts expect them to settle before then.

At a Glance:

PepsiCo Inc. said its fourth-quarter earnings slid 1.1% on lower-than-expected shipments of soft drinks in the United States and on increased spending to boost sales. Profit from operations fell to $522 million, or 65 cents a share, from $528.3 million, or 66 cents, a year ago . . . Sprint Corp. said fourth-quarter earnings rose 34%, beating estimates, before restructuring and accounting charges resulted in a bottom-line loss. Profit from operations totaled $278 million, or 79 cents a share, up from $207 million, or 59 cents, a year ago . . . Baxter International Inc. posted stronger-than-expected fourth-quarter earnings: up 11% to $148 million, or 54 cents a share, from $133 million, or 47 cents, a year earlier.