You are using an older browser version. Please use a supported version for the best MSN experience.

Time Warner Earnings Beat Expectations Powered by ‘Westworld,’ ‘Fantastic Beasts’

Variety logo Variety 2/8/2017 Brent Lang
© Provided by Variety

Film hits like “Fantastic Beasts and Where to Find Them” and new “water cooler” shows like “Westworld” brightened Time Warner’s most recent financial quarter.

Revenues at the conglomerate that is home to HBO, Warner Bros., and Turner rose 11% to $7.9 billion during the three-month period ending in December, while operating profits jumped 25% to $1.8 billion. Adjusted earnings per share topped out at $1.25, an 18% increase from the $1.06 Time Warner recorded during the prior-year quarter. Net income was down sharply, falling from $857 million in the comparable period to $293 million in the most recent quarter. Time Warner attributed the decline to $1 billion it spent in debt repurchases.

The adjusted results and double-digit revenue increase beat expectations. Wall Street was projecting earnings of $1.19 a share on $7.72 billion in revenue, according to Reuters.

The strong financial performance comes as the company is in the midst of trying to complete the $85.4 billion merger set in October with AT&T. The telecom giant hopes will marry Time Warner’s networks and movie studio with its broad platform of wireless, mobile phone and DirecTV subscribers. Although the deal still faces a rigorous review by federal regulators at a time of uncertainty in Washington, Time Warner said the transaction is expected to close by the end of this year.

“All our operating divisions increased revenue and profits while also making investments to capitalize on the growing demand for the very best video content and new ways to deliver it to audiences around the world,” said Jeff Bewkes, Time Warner CEO, in a statement.

Bewkes noted that Warner Bros. had its second-best year at the global box office in 2016 and was once again the top supplier of programs to broadcast networks. The film side of the business had suffered in recent years, mired down in flops like “Pan” and “Jupiter Ascending.” But the studio recaptured its stride last year and closed 2016 on a high note. Revenues increased 17% to $3.9 billion due to the studio’s success with “Fantastic Beasts and Where to Find Them,” a Harry Potter spin-off, and “The Accountant,” a Ben Affleck thriller. Another Affleck film, “Live By Night,” flopped, leading to an estimated $75 million in losses, but that didn’t get a wide release until January and won’t show up in financial results until later this year. Operating income for Warner Bros. rose 57% to $574 million.

HBO also had a strong quarter, one that was fueled by subscription revenue growth and a buzzy start for “Westworld,” a science-fiction thriller that became the most watched freshman series in HBO’s history. Revenues for the cable channel increased 6% to $1.5 billion.

Operating income for the premium cable network behind “Veep” and “Game of Thrones” increased 9% to $429 million.

Turner, the Time Warner unit behind TBS, TNT, and CNN, saw its revenues increase 7% to $2.8 billion, on a rise in international subscriptions, even as advertising sales fell by 2%. Time Warner noted that programming expenses for the Turner unit climbed 5% because of the resources CNN plowed in to covering the 2016 presidential election and the cost of the rebranding campaigns and new program launches at TBS and TNT.

Operating income at Turner increased 8% to $841 million.

Shares of Time Warner rose slightly in pre-market trading, climbing .47% to $96.97.

AdChoices
AdChoices

More from Variety

AdChoices
image beaconimage beaconimage beacon