NEW YORK (AP) — Time Warner said Wednesday that its fourth-quarter net income dropped 12 percent, as investments in programing and other costs offset revenue growth.
The New York-based media and entertainment company's adjusted profit and revenue beat Wall Street predictions.
Revenue rose at Time Warner's Warner Bros., Turner and HBO arms, while it was flat at the company's Time Inc. publishing division, which the company said it still plans to spin off by the end of the second quarter.
Time Warner's revenue rose 7 percent to $4 billion, helped by the release of popular films such as "Gravity" and "The Hobbit: The Desolation of Smaug." But that growth was partially offset by lower home video and TV licensing revenue.
Turner's revenue rose 3 percent to $2.5 billion, mainly as a result of higher subscription revenue. Advertising revenue rose just 1 percent, as growth at its domestic entertainment networks was offset by the effects of lower spending on political advertising at its domestic news networks.
HBO's revenue also rose 6 percent to $1.3 billion, as the company charged higher rates for its domestic service.
But the revenue gains were offset by investments in programing and other costs. Adjusted operating income fell at both Turner and HBO, while rising at Warner Bros.
Time Warner earned $983 million, or $1.06 per share, compared with $1.11 billion, or $1.15 per share, in the same quarter a year ago.
Excluding one-time items, the company posted an adjusted profit of $1.17 per share. Analysts surveyed by FactSet expected $1.15 per share.
Revenue rose 5 percent to $8.57 billion from $8.16 billion. Analysts expected $8.38 billion in revenue.
For the full year 2013, Time Warner earned $3.69 billion, or $3.92 per share, up from $2.93 billion, or $3 per share, in 2012. Revenue rose to $29.8 billion from $28.73 billion.
Excluding Time Inc., the company said it expects its 2014 adjusted earnings per share to rise by the "low-double-digits" from their 2013 level.
The company also said that its board approved a 10 percent increase to its quarterly cash dividend, boosting it to 31.75 cents.
Time Warner shares fell 69 cents, or 1.1 percent, to finish at $63.09. Its shares have risen more than 26 percent over the past year.