Time Warner (TWX) stock is up more than 1% to $56 after the company decided to spin-off its entire publishing division into the independent, publicly traded Time Inc. The company aims to complete the spin-off by the end of the current calendar year.

Time Warner Chairman and CEO Jeff Bewkes expressed belief that the move was the best choice of many. “After a thorough review of options, we believe that a separation will better position both Time Warner and Time Inc. A complete spin-off of Time Inc. provides strategic clarity for Time Warner Inc., enabling us to focus entirely on our television networks and film and TV production businesses, and improves our growth profile.”

“Time Inc. will also benefit from the flexibility and focus of being a stand-alone public company and will now be able to attract a more natural stockholder base,” he said.  “As we saw with the prior spin-offs of Time Warner Cable and AOL, we expect the separation will create additional value for our stockholders.”

The spin-off stands to turn a profit for Warner, whose profits come primarily from its movie and television divisions.

Despite Bewkes’ optimism, Janney Capital Markets’ Tony Wibble expects obstacles ahead.

“While today’s move will help support the stock’s run up to a 52 week high, we believe there are far bigger factors facing Time Warner. We see the looming upfront and the 2014 affiliate fee renewal cycle as much more significant given that the Networks division accounts for 50% or revenue and 75% of operation income. Growth in TWX’s core operating income (measured before corporate or eliminations) will increase to 6.5% and 8.8% in 2013 and 2014 from the 5.9% and 8.3% levels today. We essentially see only about a 50 to 60 bps lift in growth from today’s move; however, the move would keep any future earnings pressure from publishing at bay.”

On the other hand, Meredith Corp. (MDP) which had been in talks with Time Warner to acquire much of the publishing divisions’ titles has experienced a 7.5% decrease in shares. Media reports suggested that a deal with Meredith would see Time Warner handing over the majority of its titles, excluding Fortune, Time and Sports Illustrated. It seems, however, that Bewkes decided instead to wash his hands of the whole thing.

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