Profit down but Turner stock is up
Operating cashflow for the quarter declined 15% to $ 96 million without the benefit of a $ 19 million one-time tax gain in the comparable quarter a year earlier.
While no estimates were available, investors and analysts were evidently pleased with the results, sending Turner's Class A shares $ 1 higher to close at $ 23.
For the year ended Dec. 31, Turner reported anet loss of $ 244 million or 92 cents per share after extraordinary charges of $ 306 million due to an accounting change and $ 11 million for debt retirement and related costs. Revenues grew 9% to $ 1.9 billion.
Excluding those charges, however, Turner posted an annual 112% gain in profits to $ 72 million or 27 cents per share.
Operating income last year edged up just slightly more than3% to $ 417 million as the company -- as expected -- took a $ 52 million operating loss related to its new ventures.
"The start-up costs were a little bit higher than I expected, but I think this is the worst year for them," said John Reddan, analyst at Moran & Associates. "Turner indicated they would not be as high in '94. It looks like the worst is behind the company."
On a unit basis, revs in the entertainment segment climbed 8% to $ 1.16 billion although operating profit slipped 6% to $ 143 million because of a $ 25 million cost related to the launch of Cartoon Network and its international offshoots. Homevid revenues also dipped by $ 26 million last year.
"While we acknowledge the earnings and cashflow impact of these investments, our success has been built with the philosophy of sacrificing some short-term profit growth, when appropriate, in order to build long-term value for our shareholders," chairman Ted Turner said in a statement.
On the news front, operating profits rose 19% to $ 212 million for 1993. "News had a very good year," said Morgan Stanley analyst Alan Kassan, noting ad revenue gains of 11% and a 16% advance in subscription sales.
