Time Warner Tops Q4 Earnings Estimates, Misses On Revenue

Adjusted operating income for the segment increased 5% to $921 million due to higher revenue.

Time Warner's HBO segment revenues grew 6% to $1,338 million driven by growth of 5% in subscription revenues and 14% in content and other revenues. Higher subscription revenues were primarily attributed to a rise in domestic rates and subscribers. On the other hand, content and other revenues increased on account of a rise in home video revenues.

Adjusted operating income for the division declined 5% to $394 million because of increased programming, distribution and marketing expenses.

Warner Bros. revenues fell 5% to $3,815 million because of fall in home entertainment and videogames revenues and currency translation headwinds. This was partly offset by increased television licensing revenues.

Adjusted operating income for the division plunged 32% to $391 million due to fall in revenues and higher restructuring and severance charges.

Other Financial Aspects

Time Warner ended the quarter with cash and equivalents of $2,618 million, long-term debt of $21,376 million and shareholders' equity of $24,476 million. The company’s Board of Directors also announced a 10% hike in its quarterly dividend to 35 cents a share.

During the quarter, Time Warner incurred capital expenditures of $158 million and generated free cash flow of $903 million. From Jan 1, 2014 through Feb 6, 2015 the company bought back about 80 million shares, aggregating approximately $5.8 billion. As of Feb 6, the company still had $4.2 billion remaining at its disposal.

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