Time Warner Inc. (TWX) reported better-than-expected fourth-quarter 2009 results that topped the Zacks Consensus Estimate, on the heels of record profits at its Studio and Networks segments.

The quarterly earnings of 55 cents a share surpassed the Zacks Consensus Estimate of 52 cents. In the prior-year quarter, the company had reported earnings of 19 cents a share. On a reported basis Incorporatedluding one-time items, quarterly earnings came in at 53 cents a share compared to a loss of $13.41 posted in the year-ago quarter.

Outlook Improving

Time Warner, which spun off AOL (AOL) and Time Warner Cable (TWC), has raised its business outlook. The company now expects fiscal year 2010 earnings to rise in the mid-teens on a percentage basis. On the back of stronger-than-expected results, management also boosted its quarterly dividend by 13.3% to 21.25 cents a share and increased the share repurchase authorization to $3 billion.

Another major media conglomerate, News Corporation (NWS), raised its quarterly dividend by 25% to 7.5 cents a share.

Revenue Breakdown

Time Warner’s fourth quarter revenue climbed 2.2% to $7,320 million, driven by growth experienced across Networks and Filmed Entertainment segments, partially offset by a decline in the Publishing segment. Adjusted operating income before depreciation and amortization (OIBDA) rose 34.9% to $1,516 million.

Networks revenue jumped 4.1% to $3,058 million, driven by 11% growth in subscription revenue, offset by a 22% fall in content revenue and a 4% decline in advertising revenue.

Filmed Entertainment revenue climbed 6.6% to $3,320 million, driven by strong theatrical releases and growth in revenue from home video and interactive games.

Time Warner is still grappling with the slump in advertising demand with advertisers migrating to the Internet driven by increasing online readership. Consequently, Publishing revenue dipped 13.2% to $1,101 million, reflecting a 12% fall in advertising revenue, 6% decline in subscription revenue and 28% drop in other revenue.

At the end of fiscal year 2009, Time Warner had cash and cash equivalents of $4,800 million, long-term debt of $15,357 million and shareholders’ equity of $33,726 million. The company ended the year with free cash flow of $2,856 million.

Estimate Revisions

In the last 7 days, the Zacks Consensus Estimate had shown a slight improvement of 2%, with only one analyst raising his or her estimate out of 21 analysts covering the stock. Time Warner’s quarterly earnings topped the Zacks Consensus Estimate by 5.8%. The company’s earnings surprise history for the preceding four quarters varies between negative 11.5% and positive 25%, with the average being positive 8.9%.

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