Time Warner Reports Revenue Slumps 6 Percent

Time Warner Inc, the owner of cable channels CNN, HBO and Cartoon Network, reported a 6 percent fall in quarterly revenue, hurt by a lack of hit movie releases in the period from its Warner Bros studio.

The company's revenue fell to $7.08 billion in the fourth quarter ended Dec. 31 from $7.53 billion a year earlier.

Net income attributable to Time Warner shareholders rose to $857 million, or $1.06 per share, from $718 million, or 84 cents per share.

The picture was brighter at HBO and at Turner, the company’s broadcasting divisions. HBO’s revenues increased 6% to $1.4 billion, due to domestic subscriber growth. The label did say that higher programming costs and technology expenses related to the launch of its streaming service HBO NOW had left operating income essentially flat at $393 million.

Turner revenues rose 2% to $2.7 billion on higher ad revenues thanks to the Major League Baseball playoffs. Higher programming costs took a bite out of operating income, pushing it down 1% to $777 million.

In a boon to stockholders, Time Warner increased its annual cash dividend on its Common Stock from $1.40 per share to $1.61 per share and inaugurated a new $5 billion stock repurchase program.

Variety reports Time Warner is reporting its financial results as media companies are battling skepticism by the financial community about the longterm health of the cable business. There are concerns that the rise of digital streaming services could lead to subscriber losses, undermining a business model that has produced record profits at many conglomerates. The company’s stock nose-dived during its third quarter earnings call after it lowered its earnings projections.