Time Warner earnings top expectations
The media giant gets a boost from ‘Wonder Woman’ and HBO.
“Wonder Woman” proved its mettle once again, boosting media company Time Warner Inc.’s earnings with its better-than-expected box-office performance.
Time Warner’s secondquarter earnings, released early Wednesday, also benefited from increased subscriptions for the company’s premium television unit HBO, which recently began showing the seventh season of its acclaimed series “Game of Thrones.”
Time Warner is awaiting the U.S. Department of Justice’s approval of its $85-billion sale to telecommunications giant AT&T Inc., which the companies have said should come later this year.
Time Warner’s profit for the quarter that ended June 30 surpassed analyst expectations. The New York company earned $1.33 a share, up from $1.29 a share in the year-earlier quarter. Revenue climbed 5% to $7.3 billion.
Analysts had projected earnings of $1.19 a share on revenue of $7.3 billion, according to Thomson Reuters.
But Time Warner’s operating income sank 8% to $1.7 billion because of higher costs, including at Turner Broadcasting, which had to pay higher fees for the rights to broadcast sports, and at Warner Bros.
“Wonder Woman,” which was directed by Patty Jenkins and starred Israeli actress Gal Gadot, packed quite a punch for Burbankbased Warner Bros., hauling in more than $800 million in ticket sales worldwide.
Warner Bros.’ revenue increased 12%, or $330 million, to $3 billion, lifted by higher theatrical and video game revenue. The home video release of “The Lego Batman Movie” also helped the studio’s results, which were mixed.
Operating income fell 28%, or $85 million, to $223 million for the quarter because of higher film and advertising costs.
At the Home Box Office division — which includes HBO and Cinemax — revenue was up 1%, or $9 million, to $1.5 billion. Subscription sales were up 8%, or $104 million, due to higher fees and international growth. That increase was partially offset by a decline of 44%, or $95 million, in content and licensing revenue.
Home Box Office’s operating income increased 10%, or $50 million, to $531 million because of stronger sales and lower expenses.
At the company’s largest unit, Turner Broadcasting, revenue grew 3%, or $92 million, to $3.1 billion, the result of higher affiliate fees and international growth. CNN posted a strong quarter in the ratings. However, advertising revenue for the entire cable network group was down 6%.
Turner’s operating income fell 7%, or $80 million, to $1.1 billion in the quarter. The revenue growth was offset by higher expenses, mainly because of increased programming costs, including fees for rights to NBA and college basketball.
“We’re very pleased with our first-half results, which keep us on track to achieve our objectives for the year,” Time Warner Chief Executive Jeff Bewkes said in a statement.