Time Warner reported higher fourth-quarter profits despite lower revenues.
The gains came because of a positive change in taxes. The company's TV businesses reported lower operating income.
Time Warner's net income rose 18% to $857 million or $1.06 a share from $718 million, or 84 cents a share, a year ago.
Revenues dropped 6% to $7.1 billion.
The earnings topped Wall Street estimates, while revenues were below expectations.
The company also raised its dividend by 15% to 40.025 cents per share and authorized a new $5 billion share repurchase program.
“All three of our operating divisions increased revenue and profits while also investing to capitalize on the shift to on-demand viewing and growing worldwide demand for the very best video content,” said CEO Jeff Bewkes talking about the company’s full-year results.
“Home Box Office grew subscribers both on its linear networks and through HBO Now, our new stand-alone streaming service,” Bewkes added. "Turner continued to prove its tremendous value to its audiences, distributors, and advertisers with TBS, TNT and Adult Swim all ranking among ad-supported cable’s top 10 networks in primetime among adults 18-49 for the year. CNN was the fastest-growing top 40 cable network in its key demographic in the U.S. for the year, and Cartoon Network was the only top 3 kids network to grow ratings.”
For 2016, Time Warner says it expects adjusted earnings per share to be in the $5.30 to $5.40 range, up from $4.75 in 2015.
Higher programming costs impacted Time Warner’s Turner Broadcasting and HBO units in the fourth quarter.
Turner Broadcasting’s fourth quarter adjusted operating income dropped 15% to $781 million because of rising programming expenses, which were up 22%.
Turner revenues rose 2% to $2.7 billion. Ad revenues were up 5%. News and the baseball playoffs contributed to the increase in ad revenue.
Subscription revenue was flat because of lower subscribers.
HBO operating income was flat at $393 million as revenue gains were offset by higher expenses. Expenses were up because of higher marketing and technology costs from the HBO Now streaming service. Programming costs were up 11%.
HBO revenues were up 6% to $1.4 billion. Subscription revenues were up 3% because of higher domestic rates, offset by lower international revenue.
Warner Bros. adjusted operating income was up 5% to $373 million. Revenues fell 13%.