Analyst: This Quarter Was Not A 'Pivot Point' For Time Warner, But Their Strategy Is Still Working

Media giant Time Warner Inc TWX came out with mixed fourth-quarter earnings today. Although the company beat analysts EPS forecast of $0.94 per share, by posting an EPS of $0.98, it posted revenues of $7.53, slightly short of analysts’ expectations of $7.54 billion. Time Warner also raised its quarterly dividend by $0.10 to $0.35.

Matthew Harrigan, analyst at Wunderlich Securities, was on CNBC to discuss the company's results.

“I think the ad-sales contraction are almost exactly spot on for what we [modelled in] honestly, pretty much in-line with consensus,” Harrigan said. “Yeah, I think there are some ratings issues, I also think that broadly across all of television there are some measurement issues relative to Nielsen in terms of how people consume video from Time Warner content engine and other media companies. So, I really think Time Warner is a bit of a transitional story.”

He continued,“This year I think when you get out to 2016, you’ll see a further ramp in affiliate fees and they also have a very strong Warner Brothers pipeline of DC Comic characters and such and […] they just had a nice success of American Sniper as well. So, I think this quarter was not really a pivot point, but still the strategy is working, they are doing very good job in the cost side as well.”

Any Questions That HBO Remains The Crown Jewel?

“I think HBO is a business that the Street has always undervalued and even Warner is because the quarters tends to be so lumpy and we have just seen people underestimate how strong the long-term earnings power is…we love HBO,” Harrigan said.