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​As Fox drops its bid, what's next for Time Warner?

Time Warner (TWX) needs to prove that bigger isn't better.

With 21st Century Fox (FOXA) withdrawing its unsolicited $80 billion bid for the rival media company, Time Warner chief executive Jeff Bewkes pitched investors on the company's outlook for growth and providing shareholder returns.

Bewkes, speaking on a conference call to discuss the company's second-quarter results, refused to address Fox's proposal and its withdrawal. Instead, he sought to demonstrate the strength of a media conglomerate that's slimmed down under his leadership, thanks to the spinoff of Time Inc. earlier this year.

"We have leading scale in all our businesses," Bewkes said on the Wednesday conference call. "We're not lacking something that we need."

What wasn't discussed was whether another bidder might appear to fill Fox's vacuum, as well as what Time Warner executives made of Fox's sudden decision. Rupert Murdoch, the billionaire who controls Fox, reportedly sent Bewkes a terse email on Tuesday afternoon, informing him of the decision.

For Fox, which will report earnings later on Wednesday, the decision comes after its stock price declined because of the offer. Murdoch and his executives came to the conclusion that they wouldn't succeed in their unwanted bid, as Time Warner dug in its heels and vowed to remain independent, Bloomberg reports.

The called-off bid relieved Fox investors, who sent shares of the media company up as much as 6.2 percent. Time Warner shares, meanwhile, dropped as much as 12.5 percent, erasing much of the gains enjoyed after Fox's bid.

For Bewkes, the conference call wasn't only a chance to tout the company's second-quarter results, but gave him an opportunity to stress to investors why Time Warner will succeed on its own.

Asked about which businesses are under-appreciated by investors, Bewkes noted the company's brands are creating "high-quality" content that's increasingly valuable, given consumers' demands for tapping shows and movies through new platforms such as Netflix and Amazon.

"I don't think there's a full appreciation of what we do there, both in film and TV," Bewkes noted. "Take DC [Comics], which is pumping out so many new shows at Warner this year," as well as the potential for increased sales from DC Comics-linked consumer products.

He added, "We're confident we can drive very strong revenue growth."

Still, the company is facing some headwinds. While second-quarter revenue rose 3 percent to $6.79 billion, that missed the average analyst estimate of $6.88 billion, according to Bloomberg. Per-share earnings were 98 cents a share, above analysts' estimates for 84 cents.

Advertising sales, which stem in part from TV networks such as TNT and TBS, will likely be flat to down in the third quarter, chief financial officer Howard Averill said on the conference call.

Ratings at television networks are lackluster, Bewkes said, speaking of the industry as a whole. "Essentially viewing was stable, but a little on the weak side," he noted.

HBO, one of the company's strongest assets, increased its active users by 35 percent compared with last June, and the company is investing in a new version of HBO Go in order to appeal to multiplatform viewing, Bewkes noted.

He added, "Our strong results are evidence that our strategy is working."

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