Time Warner posts strong earnings, helped by ‘Fantastic Beasts,’ TV production and HBO
The popular HBO series “Westworld” and the Harry Potter spinoff movie “Fantastic Beasts and Where to Find Them” helped Time Warner Inc. deliver strong profits in the fourth quarter that easily beat Wall Street’s expectations.
The media conglomerate’s revenue, announced Wednesday, grew 11% from a year earlier to $7.9 billion, topping projections of $7.73 billion. Net income jumped 25% to $2.8 billion. Adjusted earnings per share was $1.25, up 18% year over year — and 6 cents better than what analysts predicted.
Time Warner has a deal to be acquired by telecom giant AT&T for $85.4 billion. Time Warner Chairman Jeff Bewkes said the companies “remain on track to close the transaction by the end of the year.”
Revenue for Time Warner’s film and television production studio Warner Bros. climbed 17% to $3.9 billion, thanks mainly to the strong performance of “Fantastic Beasts” and continued growth in revenue from TV program licensing and sales.
Warner Bros. is producing 75 series for the 2016-17 television season, including 36 for the broadcast networks, the most of any studio.
Operating income for the unit grew 57% to $574 million.
Time Warner’s Turner Broadcasting unit saw its revenue rise 7% to $2.8 billion, while adjusted operating income was up 8% to $841 million. A 14% increase in revenue from cable and satellite operators helped offset a 2% decline in the unit’s ad revenue. While ad revenue was up at CNN, which had its largest audience ever in 2016 thanks to interest in the presidential campaign season, Turner has seen ratings decline at its entertainment channels TBS and TNT.
Premium cable network HBO’s revenue rose 9% to $1.5 billion as subscriptions grew, while adjusted operating income grew 10% to $431 million. The unit touted the successful launch of its original drama “Westworld,” which averaged 13 million viewers, making it the most-watched first-year series in its history.
HBO is also seeing growth in its “over the top” streaming service that makes the channel available to viewers through broadband Internet services. The company said it now has 2 million subscribers using the service.
Time Warner issued full-year financial results as well, which showed revenue of $29.3 billion, up 4% from the year before, and net income of $7.6 billion, a 10% gain. Adjusted earnings per share were $5.86, up 23%.
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