Earnings: Time Warner | Boeing | Kodak | Eli Lilly and Co.

Time Warner 4Q Profit Climbs 34 Percent

Time Warner Inc.'s (TWX) profit jumped 34 percent in the fourth quarter, boosted by the sale of Internet access businesses in Europe and a deal that added new subscribers to its cable TV unit.

The world's largest media company, which owns Warner Bros., the magazine publisher Time Inc. and the second-largest cable TV operator in the country, said Wednesday it earned $1.75 billion, or 44 cents per share, for the three months ending in December, up from $1.3 billion, or 28 cents a share, in the same period a year ago.

Revenues rose 8 percent to $12.5 billion from $11.5 billion.

The results included a gain of $769 million from the sale of AOL's Internet access businesses in the U.K. and France as well as a restructuring charge at AOL of $179 million.

Excluding those gains and other one-time effects, operating income before depreciation and amortization rose 13 percent to $3 billion from $2.7 billion in the same period a year ago on higher profits from cable TV systems and cable TV networks such as HBO and TBS.

The company also recorded an expense of $615 million related to securities litigation.

Without one-time items or discontinued operations, the company posted profits of 22 cents per share in the most recent period, in line with the estimates of analysts polled by Thomson Financial, versus 23 cents per share in the year-ago period.

Time Warner's cable unit in July of last year acquired a number of cable subscribers from Adelphia Communications Corp. in a three-way deal with Comcast Corp., the top cable company in the country. Following the deal, Time Warner had about 13.4 million cable subscribers.

Revenues at the company's AOL unit fell 8 percent and adjusted profits fell 10 percent as it continues to revamp its business model away from selling Internet access and toward selling online advertising.

AOL began offering many of its services for free in hopes of attracting more traffic online. AOL lost another 2 million U.S. Internet access customers in the quarter, leaving it with 13.2 million as of the end of the year.

Time Warner also said it expects full-year earnings for 2007 to be $1 per share, assuming it completes its $20 billion stock buyback program in the first half of the year. Analysts polled by Thomson Financial had been expecting $1.01.

For the full year, Time Warner earned $6.55 billion, or $1.55 per share, up from $2.67 billion, or 57 cents per share, a year earlier, as revenues rose 4 percent to $44.2 billion from $42.4 billion.

Both periods included significant one-time effects, including gains from asset sales and expenses related to settling shareholder lawsuits and government investigations, a legacy of the fallout from the company's agreement to be bought by AOL in 2000.

Excluding special items and in both periods as well as discontinued operations, full-year earnings came to 81 cents per share versus 73 cents per share in the prior year.

Time Warner shares rose 2 cents to $22.06 in premarket trading.

Boeing 4Q Profit More Than Doubles

(Associated Press) CHICAGO - Boeing Co. (BA) said Wednesday its 4th-quarter earnings more than doubled due largely to robust commercial airplane and defense system business.

For the quarter ending Dec. 31, the airplane maker's net income was $989 million, or $1.29 per share, compared with $460 million, or 58 cents per share, a year earlier.

Excluding charges and other tax gains, Chicago-based Boeing said its adjusted earnings per share for the quarter were $1.16.

Fourth-quarter revenue climbed 26 percent to $17.5 billion, surpassing Wall street expectations.

On average, analysts surveyed by Thomson Financial forecast earnings per share of 98 cents and $16.5 billion in revenue for the world's No. 2 commercial airplane maker.

"2006 was a very good year for Boeing," Chief Executive Jim McNerney said in a statement. "We achieved new records in revenue, cash flow and backlog, and overcame come meaningful challenges by focusing on improving productivity and meeting our commitments."

Boeing booked a record number of orders for new commercial planes, raising its year-end backlog to $250 billion, up 22 percent.

For the year, Boeing said its 2006 profit fell 14 percent to $2.2 billion, or $2.85 per share, from $2.6 billion or $3.20 per share in 2005. Its 2006 revenue was $61.5 billion, a 15 percent increase from $53.6 billion last year.

The company's Seattle-based Boeing Commercial Airplanes unit saw its fourth-quarter operating earnings double to $665 million from $330 million. The unit's revenue increased 37 percent to $7.6 billion, up from $5.5 billion. Meanwhile, operating margins grew nearly 3 points to 8.7 percent.

Defense sales grew 18 percent to $9.7 billion, up from $8.2 billion during the year-ago quarter.

Executives said the company is continuing to address issues with the weight of its much-anticipated 787 "Dreamliner," which is expected to begin flight tests this year. Boeing recently scrapped plans for a wireless entertainment system in the plane after struggling with regulatory approval and the extra weight of the program.

"Boeing continues to expect the 787 will be delivered on time and in accord with its contractual obligations," the company said.

Boeing boosted its 2007 earnings guidance, saying it expected to earn between $4.55 and $4.75 per share on revenue between $64.5 billion and $65 billion. The company said expanded margins and revenue growth would help it earn between $5.55 and $5.75 per share in 2008.

Kodak Posts Profit, but Digital Sales Suffer

NEW YORK (Reuters) - Eastman Kodak Co. (EK), the world's top maker of photographic film, on Wednesday posted a quarterly profit as lower costs and strength in its kiosk business helped overcome a 25 percent drop in sales of digital cameras and accessories.

Kodak, which says it is nearing the end of a lengthy and expensive effort to transform itself into a provider of digital cameras and printing products and services, reported fourth-quarter net income of $16 million, or 6 cents a share, compared to a loss of $46 million, or 16 cents a share.

Excluding one-time costs and other special items, the quarterly profit was 59 cents a share. On that basis, analysts had expected a profit of 56 cents a share, according to Reuters Estimates.

Revenue for the fourth quarter fell 9 percent to $3.82 billion, off from $4.20 billion in the fourth quarter of 2005, and short of analysts estimates of $3.95 billion.

Global consumer digital group earnings from operations were $150 million, compared with $40 million a year ago, on sales of $1.154 billion, which were down 13 percent.

Kodak last year warned that its digital revenue growth would slip as it focuses on selling products that generate higher profits.

Accordingly, global sales of consumer digital cameras, memory products, and related items decreased 25 percent in the fourth quarter.

Since late 2003, Kodak has focused on digital devices, hoping to outpace the drop in demand for film, historically its main revenue source. At the same time, it is reducing costs by cutting up to 27,000 jobs and trimming manufacturing.

Lilly Profit Slumps, Hurt by Charges

NEW YORK (Reuters) - Eli Lilly and Co. (LLY) said on Wednesday its fourth-quarter earnings fell sharply, hurt by a $495 million charge to cover a settlement with former users of its Zyprexa schizophrenia drug.

The Indianapolis-based drugmaker said it earned $132 million, or 12 cents per share, compared with $701 million, or 64 cents per share, in the year-earlier period.

Excluding special items, Lilly earned 85 cents per share. Analysts, on average, expected 82 cents per share, according to Reuters Estimates.

Lilly projected earnings this year, excluding special items, of $3.25 to $3.35 per share. The Reuters Estimates forecast is $3.34 per share.

Company revenue rose 9 percent to $4.25 billion in the quarter, topping the Reuters Estimates forecast of $4.06 billion, fueled by higher sales of its Cymbalta depression treatment and higher Zyprexa sales.

Global Zyprexa revenue rose 12 percent to $1.16 billion, in large part because of price hikes. The company said U.S. demand remained flat for the pill, whose use has been crimped by concerns over weight gains that can increase risk of diabetes.

Cymbalta sales leaped 85 percent to $424 million, amid soaring demand in the United States and introductions of the drug in more overseas markets.

But Strattera, for attention deficit hyperactivity disorder, fell 7 percent to $156 million, as concerns about safety of the class of medicines continues to hurt U.S. sales.

Sales of Cialis, an impotence treatment that had been sold in partnership with biotechnology company Icos Corp., jumped 28 percent to $269 million.

Lilly on Monday completed its $2.3 billion acquisition of Icos, gaining full control of Cialis, whose far longer-acting formulation has allowed it to wrest market share from Pfizer Inc.'s Viagra.