Time Warner Beats Estimates; Outlook Solid

By Lisa Beilfuss 

Time Warner Inc. offered an upbeat forecast for the year after topping earnings expectations in its fourth quarter, thanks to lower costs and continued gains in its HBO segment.

Separately on Wednesday, Time Warner raised its quarterly dividend 15% to $1.61 a share and said its board approved $5 billion in additional share repurchases. Shares rose 1.4% in premarket trading.

Time Warner, the owner of Warner Bros. film studio and cable channels HBO, TNT and CNN, has been grappling with cable TV subscriber declines and the rise of online streaming. The company has said it would invest more in digital platforms and consider holding back more of its television shows for longer on its own platforms before selling them to streaming services like Netflix Inc. The company has engaged in talks to buy a stake of Hulu, another streaming service, discussions that have recently heated up, according to recent reporting by The Wall Street Journal.

In its latest quarter, higher revenue in the company's Turner and Home Box Office segments helped counter a 15% drop in revenue from the Warner Bros. business.

Lower expenses also boosted the company's bottom line. The company booked $29 million in restructuring costs in the period, down sharply from the $166 million recorded a year ago. At the same time, Time Warner reduced overhead costs by 16%.

In all for the quarter, Time Warner reported profit of $857 million, or $1.06 a share, up from $718 million, or 84 cents, a year earlier. Revenue slid 5.9% to $7.08 billion. Analysts surveyed by Thomson Reuters had projected $1.01 in adjusted profit per share on $7.53 billion in revenue.

For the year, Time Warner said it expects to earn an adjusted $5.30 to $5.40 a share this year, above the $5.26 analysts have projected and up from its earlier prediction of $5.25 a share.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

February 10, 2016 07:44 ET (12:44 GMT)

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