Time Warner makes dollars 86m profit before dividends

NEW YORK - Time Warner, the global communications giant created out of the 1990 merger of two US media conglomerates, continued to pay off its enormous debt last year, managing to squeeze out an dollars 86m ( pounds 61m) profit before paying preferred dividends, writes Larry Black.

The small profit, which ended up as a loss of dollars 1.46 a share after the dividends, compared to an operating loss of dollars 99m, or dollars 2.40 a share, for 1991. For the final quarter of 1992, Time Warner lost 25 cents a share, compared with 29 cents for the same period in 1991.

Cash flow before interest and taxes - a better gauge of the company's operating margins - rose 11 per cent on the year to dollars 2.5bn.

For the fourth quarter, the figure was dollars 731m, a slight weakening in earnings, analysts said. But thanks to a series of recent new debt offerings, Time Warner has managed to reduce its overall cost of capital in the past year.

Revenues rose to dollars 13bn in 1992 from dollars 12bn the year before, 'satisfactory' growth considering the difficult year most US media groups had because of declining advertising revenues.

Time Warner's chairman, Gerald Levin, expects a much stronger 1993, with continued progress in retiring expensive takeover debt.