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Time Warner’s Q4 HBO Growth Can’t Offset Company’s Box Office Sales Drop

TWX increases dividend on fourth-quarter profit jump

Time Warner Inc. unveiled a mixed bag in earnings early Wednesday morning, reporting a downshift in fourth-quarter revenue but an uptick in earnings. The bottomline was good enough for the company to increase its quarterly cash dividend by 15 percent.

It was the company’s cable TV offerings — HBO and Turner — that grew the top line, but the comparitive-quarter box office sales declines out of Warner Bros. more than offset any positive revenue momentum as a whole.

Time Warner ended up reporting Q4 earnings per share (EPS) of $1.06 on $7.08 billion in revenue. The pleasant earnings were a nickel above Wall Street’s consensus estimate, but the sales figure came in well-below a Yahoo Finance forecast of $7.53 billion.

Turner experienced a 5 percent increase in advertising sales, while HBO cashed in on some higher domestic subscriber rates. Warner Bros. just could not compete with its own slate from the prior fourth quarter, which included “The Hobbit: The Battle of the Five Armies” and “Interstellar.”

Chairman and Chief Executive Officer Jeff Bewkes (pictured above) naturally focused on the most positive numbers, which in this case came from the full year. Fiscal 2015’s revenue was up 3 percent from 2014; EPS slightly out-paced that on a diluted basis, doing even better with adjustments.

“All three of our operating divisions increased revenue and profits while also investing to capitalize on the shift to on-demand viewing and growing worldwide demand for the very best video content,” Bewkes said in a statement. “Warner Bros. had its best year ever in videogames, led by ‘Mortal Kombat X’ and ‘Batman: Arkham Knight,’ and remained the No. 1 supplier of broadcast television programming, including the biggest new hit of the TV season in ‘Blindspot.'”

On the film said, the boss was happy to tout Warner’s 11 Oscar nods, coming from “Mad Max: Fury Road” and “Creed.”

“Home Box Office grew subscribers both on its linear networks and through HBO NOW, our new stand-alone streaming service,” he said, shifting to the small screen. “In 2015, HBO received 43 Primetime Emmys, the most in a single year by any network in at least 25 years — led by a record 12 Emmys for ‘Game of Thrones.'”

HBO has been such a standout success for the parent company that Bewkes has faced calls from some shareholders recently to sell or spin if off.

“Turner continued to prove its tremendous value to its audiences, distributors, and advertisers with TBS, TNT and Adult Swim all ranking among ad-supported cable’s Top 10 networks in primetime among adults 18-49 for the year,” Bewkes wound down his remarks. “CNN was the fastest-growing Top 40 cable network in its key demographic in the U.S. for the year, and Cartoon Network was the only top 3 kids network to grow ratings.”

Thanks to the board’s approval of a cash dividend bump, now, on an annual basis, Time Warner will pay out $1.61 on its common stock.

The company has 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.

TWX stock closed Tuesday at $63.11 — down $4.19, or a negative 6.23 percent.

Senior management will host a conference call to discuss its financial results at 10:30 a.m. ET today.