n”>(Reuters) – Time Warner Inc reported a better-than-expected quarterly profit, helped by higher subscription fees for channels under its Turner Broadcasting and HBO units.
Revenue from Turner, which owns channels such as CNN, TNT and Cartoon Network, rose 2.3 percent in the fourth quarter. Revenue from HBO, whose popular shows include “Game of Thrones” and “True Detective”, increased 6.2 percent.
The two businesses together account for more than half of Time Warner’s total revenue.
The company’s shares were little changed at $80.76 in afternoon trading.
“Subscription revenue growth will slow materially this year before re-accelerating well into the double digits in 2016 and beyond,” Chief Financial Officer Howard Averill said on a conference call.
A stronger dollar is expected to hurt subscription revenue to some extent, he said.
Time Warner cut jobs in its Turner unit last year to reduce costs and spun off its publishing business Time Inc to focus on its more profitable broadcasting businesses.
Time Warner is now a “much leaner, faster, quicker organization,” Topeka Capital Markets analyst David Miller told Reuters on Wednesday.
As a result, the company’s margins are expected to grow through 2016, he said.
Time Warner reported margins of 23.4 percent for 2014, adjusting for the separation of Time Inc, compared with 24.3 percent for 2013.
The company 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.
The company forecast adjusted profit of $4.60-$4.70 per share from continuing operations for 2015. Analysts were expecting earnings of $4.66 per share, according to Thomson Reuters I/B/E/S.
Macquarie Research analyst Timothy Nollen said the company’s profit forecast was good, given the negative impact of a stronger dollar.
Net income attributable to Time Warner shareholders fell 27 percent to $718 million, or 84 cents per share, in the quarter ended Dec. 31.
Excluding items, the company earned 98 cents.
Revenue fell 1 percent to $7.53 billion, mainly due to a 4.5 percent fall in revenue in its Warner Bros movie studio business.
Analysts an average had expected earnings of 93 cents per share and revenue of $7.55 billion.
(Editing by Sriraj Kalluvila, Savio D’Souza and Kirti Pandey)
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