* Media company’s EPS beats Street view
* Sees 2013 profit rising in low double-digits
* CEO discusses HBO, movie studio changes
* Shares rise 4.5 percent
By Liana B. Baker
Feb 6 (Reuters) - Media company Time Warner Inc on Wednesday reported fourth-quarter net income that beat estimates, raised its dividend and started a new stock repurchase program, sending its shares up 4.5 percent.
Time Warner has undergone major changes in recent months. Its Time Inc magazine unit said last week it would lay off 500 people, or 6 percent of total staff at magazines such as Time, People and Sports Illustrated.
Time Warner last week also appointed a new chief for its Warner Brothers TV and movie studio. In November, it tapped former NBC Universal CEO Jeff Zucker to run CNN. Reuters recently reported that Time Warner is evaluating whether to sell its New York headquarters.
Time Warner CEO Jeff Bewkes spent most of Wednesday’s earnings call with analysts fielding questions about the premium pay TV service HBO and the company’s movie business.
Bewkes said HBO added 1.9 million U.S. subscribers last year, bringing total global customers to 114 million. He downplayed a recent deal by rival Netflix to acquire Disney’s first-run movies and push into original production, saying HBO offered the biggest slate of Hollywood blockbusters last year, about half of the top 25 films.
Netflix has sought to disrupt pay-TV services like HBO by signing long-term deals to carry new movies and creating original series like the recent Kevin Spacey political drama “House of Cards.”
Bewkes said he chose Kevin Tsujihara to replace Barry Meyer as CEO of Warner Bros. Entertainment because “he’s got the greatest breadth of experience across Warner’s businesses.”
“He will bring together television, theatrical, digital and home video, and consumer products,” added Bewkes.
Bewkes ducked questions about whether Warner Bros TV chief Bruce Rosenblum or movie studio head Jeff Robinov would leave their posts after being passed over for the top job, but hinted that the division would be fine without them.
“All of those execs, including Jeff and Bruce, have very strong benches of people beneath them as well. ... We’ve got really a strong next-generation coming at Warner, and all of them are young enough to go pretty long,” he said.
While the overhaul at ratings-starved CNN has dominated headlines since Zucker’s arrival, analysts appeared unconcerned, asking no questions on the call about the cable news network.
Bewkes himself made just one boilerplate remark about the CNN makeover: “I am optimistic that with the new leadership we’ve announced, CNN will once again fulfill the promise of its iconic brand.”
CNN began to make long awaited changes last Tuesday, announcing the departure of its managing editor Mark Whitaker along with three political contributors. It also hired Jake Tapper, a former chief White House correspondent for ABC, for a new weekday program.
Time Warner, which also owns cable networks TBS and TNT, said it is raising its quarterly dividend by 11 percent to $0.2875 per share. The company’s board also authorized a new $4 billion share repurchase program that started in January.
“The big surprise here is the incremental return of capital to shareholders with the new dividend and buyback,” said Janney Capital Markets analyst Tony Wible, adding that the shares were up on that news.
The company expects 2013 adjusted earnings to rise in the low double-digits in percentage terms from $3.28 per share in 2012. This matches the 11 percent increase that analysts, on average, were expecting.
The results came a day after Walt Disney Co reported earnings that beat estimates and said it expects the next few quarters to be better because of a stronger lineup of films and increased theme parks attendance. News Corp was due to report quarterly results after the market closes Wednesday.
Time Warner also plans to take a $60 million restructuring charge at its Time Inc magazines unit in fiscal year 2013 stemming from last week’s layoffs, the first major move by Chief Executive Laura Lang, who joined Time Inc in January 2012.
Operating income at the cable networks rose to $1.38 billion from $1.14 billion a year ago. The company reported a 7 percent increase in subscription revenue, driven partly by more HBO subscribers. Cable unit advertising revenues rose 3 percent.
Revenue at the movie unit fell 4 percent to $3.7 billion. It said releases of “Argo” and “The Hobbit” helped offset declines in its home entertainment and video game business.
Net income rose to $1.16 billion, or $1.21 a share, from $773 million, or 76 cents a share, a year ago.
Adjusted for impairment costs, the EPS was $1.17, which beat Wall Street estimates by 7 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 0.4 percent from a year earlier to $8.16 billion. Analysts were expecting $8.22 billion, according to Thomson Reuters I/B/E/S.
Shares rose 4.5 percent to $52.25.