Time Warner earn­ings top ex­pec­ta­tions

The me­dia gi­ant gets a boost from ‘Won­der Woman’ and HBO.

Los Angeles Times - - BUSINESS BEAT - By Meg James meg.james@la­times.com Twitt­ter: @MegJamesLAT

“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.

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