Time Warner Q4 Profit Tops View, But Revenues Miss; Sees 2016 Profit Above View

(RTTNews) - Time Warner Inc. (TWX) reported a profit for the fourth-quarter of 2015 that increased 19.4% from last year. But, quarterly revenues decreased about 6% from the prior year, due to a decline at Warner Bros., partially offset by increases at Home Box Office and Turner. The company increased its regular quarterly dividend by 15% to $0.4025 per share.

Adjusted earnings per share beat analysts' expectations, while revenues missed their estimates.

The company expects its 2016 full-year adjusted income per common share from continuing operations to be in the range of $5.30 to $5.40. Analysts expect annual earnings of $5.26 per share.

In January 2016, the Company's Board authorized a total of $5 billion in share repurchases beginning January 1, 2016, including the amount remaining under the prior authorization.

Net income attributable to shareholders for the fourth-quarter of 2015 grew to $857 million or $1.06 per share from $718 million or $0.84 per share in the year ago quarter.

Adjusted earnings per share for the quarter were $1.06, up 8% versus $0.98 for the prior year quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $1.01 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted earnings per share included the unfavorable impact of foreign exchange rates of $0.12 in the latest-quarter.

Adjusted operating income for the quarter declined 12% to $1.4 billion due to decreases at all operating divisions as well as a swing in intercompany eliminations.

Operating Income was flat at $1.4 billion as the prior year quarter included a $173 million foreign currency charge related to the remeasurement of net monetary assets denominated in Venezuelan currency resulting from a change in the foreign currency exchange rate used by the Company.

Revenues for the quarter decreased about 6% to $7.08 billion from last year's $7.52 billion due to a decline at Warner Bros., partially offset by increases at Home Box Office and Turner. Wall Street expected revenues of $7.53 billion for the quarter.

Revenues and Adjusted Operating Income included the unfavorable impact of foreign exchange rates of approximately $270 million and $115 million, respectively, in the quarter.

Revenues at Warner Bros for the quarter decreased 13% to $3.3 billion, mainly due to lower theatrical revenues, as the prior year quarter included the releases of The Hobbit: The Battle of the Five Armies, Interstellar and Annabelle, as well as the impact of foreign exchange rates.

Revenues at Home Box Office increased 6% to $1.4 billion, due to increases of 3% ($37 million) in Subscription revenues and 20% ($37 million) in Content and other revenues. Subscription revenues grew primarily due to higher domestic rates, partially offset by lower international revenues,which included the impact of the transfer to Turner of the operation of HBO's basic cable network in India. The increase in Content and other revenues primarily reflected higher international licensing revenues, partially offset by lower home entertainment revenues.

Time Warner also announced that its Board has approved a fifteen percent increase in the Company's regular quarterly cash dividend. On an annual basis, Time Warner's regular cash dividend on its Common Stock will grow from $1.40 per share to $1.61 per share.

The Board of Directors declared a regular quarterly cash dividend of $0.4025 per share on its Common Stock, payable in cash on March 15, 2016 to stockholders of record on February 29, 2016.

From January 1, 2015 through February 5, 2016, the Company repurchased approximately 52 million shares of common stock for approximately $4.1 billion. These amounts reflect the purchase of approximately 11million shares of common stock for approximately $787 million since the amounts reported in the Company's third quarter earnings release on November 4, 2015.

In January 2016, the Company's Board of Directors authorized a total of $5 billion in share repurchases beginning January 1, 2016, including the amount remaining under the prior authorization.

TWX closed Tuesday's trading at $63.21, down $4.09 or 6.08%. But, in the pre-market, the stock Up $0.29 or 0.46%.