![Murdoch Said To Mull Sky Proceeds To Boost Time Warner Bid Murdoch Said To Mull Sky Proceeds To Boost Time Warner Bid](https://api.time.com/wp-content/uploads/2014/08/452532756.jpg?quality=85&w=2400)
Time Warner posted solid quarterly earnings Wednesday, but investors are still punishing the company for rebuking a takeover bid by 21st Century Fox. The media giant generated a profit of $850 million and adjusted earnings per share of 98 cents during the second quarter, topping analysts’ estimates of 84 cents. Revenue for the quarter was $6.79 billion, missing estimates of $6.87 billion.
Time Warner shares took a pummeling in after-hours trading Tuesday when Rupert Murdoch’s 21st Century Fox announced that it was withdrawing its offer to buy the company for $80 billion. The offer valued Time Warner at about $85 per share, and the company’s stock rallied above that figure as some investors guessed that the merger was a foregone conclusion. With Fox out of the picture, Time Warner shares dove more than 12 percent in after-hours trading to below $75.
That swiveled the pressure back on Time Warner CEO Jeff Bewkes to prove that his company can be just as prosperous without joining forces with Fox. In a conference call with investors, Bewkes said he wouldn’t comment on the 21st Century Fox offer, but he went to great pains to outline his company’s rosy future. He noted that Time Warner has had the greatest shareholder returns of any company in its peer group (that would include Fox) over the last six years.
“Our strong performance this quarter and the last several years is evidence that our strategy is working,” he said. “The board and our senior management team appreciate very much the continued support of our shareholders.”
Bewkes touted the performance of HBO as a company highlight. The premium cable network generated $1.4 billion in revenue for the quarter and had the largest growth of any division. Operating income from HBO was $552 million. The medieval drama Game of Thrones was likely a big driver, as it became HBO’s highest-rated show ever during the quarter. The company is reportedly looking to expand the network’s international footprint by offering the streaming service HBO Go without a cable subscription in more countries.
Time Warner’s Turner division also saw growth, generating $940 million in operating income on $2.7 billion in revenue. However, the company’s Warner Bros. production studio saw revenues dip 2% to below $2.9 billion. The division’s operating income rose 28% to $236 million.
Bewkes also noted the spinoff of magazine publisher Time Inc. in June as a signal of Time Warner’s future as a more singularly focused company (TIME is owned by Time Inc.). The media giant has steadily shed parts of its business over the last decade, including AOL and Time Warner Cable, to focus almost exclusively on movies and television. “We’ve only just begun to reap the benefits of being a nimbler … video content company,” he said.
So far Bewkes’ arguments haven’t swayed investors much. Time Warner shares were trading at about $75.20 at 11:30 a.m., up marginally from their open of $74.90.
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