Time Warner’s business operations didn’t seem to suffer in Q3 while its leaders negotiated sale terms to AT&T. The company’s just-released earnings for the quarter topped Wall Street’s expectations — leading the company to raise its outlook for the full-year numbers, and sending shares up more than 2.4% in pre-market trading.

The entertainment giant generated $1.47 billion in net income, up 41.7% vs the period last year, on revenues of $7.17 billion, up 9.2%. The top line beat the $6.98 billion that analysts anticipated.

And adjusted earnings at $1.83 a share handily exceeded expectations for $1.37. The Q3 total includes an IRS-approved change in tax accounting that added 28 cents — but still tops forecasts when you take that out.

“We had a strong third quarter, which keeps us on track to exceed our original 2016 outlook and underscores our leadership in creating and distributing the very best content,” CEO Jeff Bewkes says.

att-time-warner
AT&T/Time Warner

The AT&T deal, he adds, “represents a great outcome for our shareholders and an excellent opportunity to drive long-term value well into the future. Combining with AT&T is the natural next step in the evolution of our business and allows us to significantly accelerate our most important strategies.”

The company now figures that adjusted EPS for the full year could go as high as $5.83 with the tax accounting change.

The Turner networks exceeded analysts’ forecasts with adjusted operating income of $1.20 billion, up 12.3%, on revenues of $2.61 billion, up 8.8%.

cnn-panel

Subscription revenues were up 12% due to rate increases, although that was partly offset by “lower domestic subscribers,” the company says. Ad sales increased 2% with CNN — with big audiences interested in the presidential election — helping to offset weakening ratings at the entertainment channels.

HBO came in a little lighter than expected with adjusted operating income up 2% to $530 million on revenues of $1.43 billion, up 4.3%. Rate increases contributed to a 5% lift in subscription revenues while content sales fell 2%. Programming costs rose 15% which the company says reflects the time of outlays to license theatrical movies and “increased expenses for original series.”

But Warner Bros had a strong quarter with adjusted operating income up 11.6% to $433 million with revenues up 6.7% to $3.40 billion. Theatrical revenues from Sully, Suicide Squad, Legend Of Tarzan and Lights Out offset a drop in video game sales vs last year which included LEGO Dimensions and Mortal Kombat X.