Bewkes continues TW restructuring; group to spin off cable company (NYT, REU)

By Nancy Tartaglione-Vialatte

Time Warner�s Jeff Bewkes announced today that the group would completely spin off its cable company. The unexpected news follows an earlier transaction in which a portion of the cable unit was spun off into a separate public company, notes the New York Times and is in keeping with the company�s move to restructure itself.

News of the decision came as Time Warner reported quarterly earnings that were largely in line with Wall Street�s expectations.

�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,� Bewkes said Wednesday in a statement. �We�re working hard on an agreement with Time Warner Cable, which we expect to finalize soon.�

Time Warner said that it had a profit of $771 million in the quarter compared with $1.2 billion in the period a year ago, a 36% drop.

The company�s film business had a 4% increase in revenue to $2.84 billion from $2.74 billion. The division�s profit declined, however, to $183 million, from $243 million in the year-ago period, reflecting a $116 million restructuring charge from reorganizing New Line Cinema, the Times reports.

The company�s America Online division, whose performance is closely watched by investors and analysts, saw its revenue decrease 23%, notes the Times.

Still, Time Warner�s other business units performed better. Its cable networks business, which includes HBO, CNN, TNT and TBS, saw revenue grow 10% to $2.7 billion.