Media

TW breaks out HBO numbers on earnings report

Time Warner chief Jeff Bewkes came out punching in the battle between HBO and Netflix.

For the first time, the media conglomerate broke out financial results for premium TV business HBO, perhaps with an eye to capturing some of the investor love currently being showered on Netflix.

The company also is looking to be more transparent about where its profits come from after it spins off its Time Inc. magazine business in the second quarter.

The HBO unit, which also houses sibling Cinemax, added two million subscribers last year, taking its total to more than 43 million domestic subscribers and 130 million globally, a 15 percent increase on the prior year. HBO increased subscriber totals by 32 percent in 2012, and 25 percent in 2011, said Chief Executive Jeff Bewkes on an earnings call with analysts.

By comparison, Netflix added 2.3 million in the fourth quarter and counts 44 million subscribers globally.

“We’re definitely thinking we’re doing it,” Bewkes added, referring to the firm’s ability to keep pushing for rate increases and increasing subscribers both at home and abroad.

HBO also revealed a host of new financial details on Wednesday morning. Revenue at the premium pay-TV company, which airs shows such as “Game of Thrones” and “Girls,” was $4.89 billion for the year versus $4.7 billion a year ago, and $1.26 billion for the quarter compared to $1.19 billion in the year-earlier period.

Advertising-free HBO recorded positive subscription revenue growth of 8 percent, in part, due to consolidation of its Asian and Nordic operations. While it boosted its year-end adjusted operating income number from $1.5 billion, to $1.67 billion, its quarterly profit took a slight dip as part of a plan to increase investment in original programming by 12 percent in the period and a decline in content sales.

It was “another very successful year for the company,” Bewkes said on the call. “This was the result of a strategy that has served us very well, not just last year, but for the past five years.”

Elsewhere, a soft market for TV news hurt CNN, taking a double-digit dip in ad revenue during the fourth quarter, according to the Chief Financial Officer, Howard Averill.

Turner Broadcasting, which houses CNN, posted a 6 percent increase in subscription revenue, but was light on the ad front, reporting just a 1 percent uptick.

At Warner Bros., revenue rose 7 percent to $4 billion on growth from such hits as “Gravity” and “The Hobbit.”

Time Warner forecast 2014 adjusted earnings per share to increase by a percentage in the low double digits from last year’s figure of $3.51, excluding Time Inc.

Full-year revenue rose 4 percent, to $29.8 billion, while operating income jumped 12 percent, to $6.6 billion.

Time Warner also expects to see a pretax gain of nearly $800 million from the sale of office space it owned in the Time Warner Center for approximately $1.3 billion.

Shares rose 1.1 percent, or 69 cents, to $63.09.