Time
Warner profit beats estimates as Turner, HBO businesses
grow
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[February 11, 2015]
(Reuters) - Time Warner Inc reported
a better-than-expected quarterly profit, helped by higher subscription
fees for channels offered by its Turner Broadcasting and Home Box Office
(HBO) businesses.
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The company's shares rose 1.2 percent to $81.75 in premarket trading
on Wednesday.
Revenue from Turner Broadcasting, which operates channels such as
CNN, TNT and Cartoon Network, rose 2.3 percent to $2.6 billion in
the fourth quarter ended Dec. 31.
The business, which accounts for 34.6 percent of total revenue, was
boosted by higher domestic rates and growth in international
markets.
Revenue from HBO, which contributes about 18 percent to total
revenue, rose 6.2 percent to $1.3 billion. The business is home to
popular programs such as "Game of Thrones" and "True Detective".
However a 4.5 percent decline in revenue in its Warner Bros movie
studio business pulled Time Warner's total revenue down 1 percent to
$7.53 billion. That was lower than analysts average estimate of
$7.55 billion, according to Thomson Reuters I/B/E/S.
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The decline in revenue at the studio, which contributes half of
total revenue, was due to the home entertainment releases of "Edge
of Tomorrow" and "Tammy" not matching up to the success of movies
such as "Man of Steel", "Pacific Rim" and "The Hangover Part III" a
year earlier.
Time Warner is also foraying into video-streaming, with a standalone
product for HBO that will make the channel available to people
without cable subscriptions this year.
Net income attributable to Time Warner shareholders fell 27 percent
to $718 million, or 84 cents per share, in the quarter.
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Excluding items, the company earned 98 cents, topping the average
analyst estimate of 93 cents.
Time Warner, which rebuffed a takeover bid from Rupert Murdoch's
Twenty-First Century Fox in 2014, is in the midst of a plan to boost
earnings and growth. The plan includes cutting jobs and reducing
costs.
Time Warner forecast 2015 adjusted profit from continuing operations
of $4.60 to $4.70 per share. Analysts were expecting a profit of
$4.66 per share.
(Reporting By Sai Sachin R and Lehar Maan in Bengaluru; Editing by
Sriraj Kalluvila and Savio D'Souza)
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