Time Warner Q4 Adj. Profit Tops View, Guides 2015 In Line; Boosts Dividend 10%

(RTTNews) - Media and entertainment giant Time Warner, Inc. (TWX) reported Wednesday a profit for the fourth quarter that declined from last year, hurt by lower operating margins as well as higher restructuring and severance costs.

However, adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also provided adjusted earnings forecast, in line with Street view.

The New York-based company reported net income of $718 million or $0.84 per share for the fourth quarter, lower than $983 million or $1.06 per share in the prior-year quarter, which included $0.05 of gains from discontinued operations.

Earnings from continuing operations for the quarter decreased to $0.84 per share from last year's $1.01 per share.

Excluding certain items, adjusted net income from continuing operations for the quarter was $838 million or $0.98 per share, compared to $991 million or $1.07 per share in the year-ago quarter.

Excluding the programming charges at Turner and restructuring and severance charges, adjusted earnings per share would have been $1.14.

On average, 30 analysts polled by Thomson Reuters expected the company to report earnings of $0.93 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter decreased 1 percent to $7.53 billion from a recast $7.60 billion in the same quarter last year, but missed twenty-eight Wall Street analysts' consensus estimate of $7.55 billion by a whisker.

Turner revenues for the quarter grew 2 percent to $2.61 billion, driven by growth of 5 percent in subscription revenues, and 3 percent in content revenues, partly offset by a 1 percent decline in advertising revenues.

Home Box Office or HBO, revenues increased 6 percent to $1.34 billion, reflecting increases of 5 percent in subscription revenues and 14 percent in content and other revenues.

Warner Bros. revenues declined 5 percent to $3.82 billion, mainly due to lower home entertainment and video games revenues as well as negative effect of foreign currency exchange rates, partially offset by higher television licensing revenues.

Restructuring and severance costs for the quarter was $166 million, compared to $51 million last year.

Operating margin for the quarter contracted 430 basis points to 18.5 percent from last year's 22.8 percent.

The company also said its board of directors declared a ten percent increase in regular quarterly cash dividend to $0.35 per share on its common stock, payable in cash on March 15 to stockholders of record on February 28, 2015.

Looking ahead to fiscal 2015, Time Warner said it expects adjusted Income from continuing operations in a range of $4.60 to $4.70 per share. Street is currently looking for full-year 2015 earnings of $4.66 per share.

TWX closed Tuesday's regular trading session at $80.81, up $0.05 on a volume of 6.31 million shares. In the past 52-week period, the stock has been trading in a range of $59.87 to $88.13.