By Ben Fox Rubin
Time Warner Inc. (TWX) said its fourth-quarter profit shrank 12%
as the media company posted higher costs and write-downs,
offsetting revenue growth.
Time Warner is spinning off its publishing business, whose
titles include Time, Sports Illustrated and People, as print media
has struggled with a yearslong downturn in ad revenue with more
marketers shifting spending to the Internet. The publisher has been
laying off staff and cutting costs as part of a broader effort to
simplify operations at its magazines and respond to shrinking print
ad revenue.
In the latest quarter, revenue at Time Inc. was essentially flat
at $966 million, on 6% lower subscription revenue but 2% higher
advertising revenue.
After the magazine unit's spinoff, Time Warner will be focused
exclusively on film and television entertainment businesses,
primarily cable networks that continue to drive the company's
growth.
The Turner segment reported 3% higher revenue to $2.5 billion,
on a 6% rise in subscription revenue and 1% higher advertising
revenue. The Home Box Office unit recorded a 6% increase in revenue
to $1.3 billion, on 8% growth in subscriptions, which partially was
offset by a 9% decline in content revenue. Warner Bros. unit
revenue rose 7% to $4 billion, mainly on stronger theatrical and
videogames slates.
Overall, Time Warner reported a profit of $983 million, or $1.06
a share, down from $1.11 billion, or $1.15 a share, a year earlier.
The company recorded $105 million in asset impairments in the
latest period, with $79 million of the total related to Time Inc.
Excluding those impairments and other items, per-share earnings
grew to $1.17 from $1.16.
Revenue improved 4.9% to $8.57 billion, while cost of revenue
increased 7.7%.
Analysts polled by Thomson Reuters expected earnings of $1.15 a
share on $8.39 billion in revenue.
For the new year, the company forecast adjusted per-share income
to rise in the low-double digits, excluding Time Inc., compared
with estimates of a 13% rise from analysts.
Write to Ben Fox Rubin at ben.rubin@wsj.com
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