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. 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 December 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. 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. 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.
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