Time Warner seems to be cruising toward its $85 billion sale to AT&T — which it expects to close by year end — based on the better-than-expected results in its Q2 earnings report out this morning. The box office strength of Wonder Woman at Warner Bros, and ratings at CNN, helped to overcome slightly lighter than anticipated results at HBO.

Associated Press

Time Warner reported net income of $1.06 billion, up 11.6% vs the period last year, on revenues of $7.33 billion, up 5.4%. The top line was slightly higher than the $7.30 billion analysts forecast. Adjusted earnings at $1.33 a share were well ahead of the $1.19 consensus prediction.

The company says it spent $101 million in the quarter to advance the sale to AT&T — including $83 million from “employee retention programs.” They include 5.7 million “special retention restricted stock units” executives received that vest over the next few years, or with retirement after the merger closes.

Execs, not including CEO Jeff Bewkes, also will receive extra cash if they stay as part of this program.

Results for the first six months of 2017 “keep us on track to achieve our objectives for the year,” Bewkes says. “Accelerating our pace of innovation and being able to connect more directly with consumers are among the exciting reasons for our proposed merger with AT&T, which remains on track to close before year end, pending regulatory review and consents.”

The Turner cable networks saw a 3% increase in revenues to $3.10 billion led by the 13% increase in subscription rates. That outweighed a 6% drop in ad sales due to the decline in domestic subscribers and last year’s lift from the NCAA Division 1 Men’s Basketball National Championship and Final Four.

Operating income fell 7% to $1.1 billion,  however, as Turner’s new NBA agreement helped to boost programming expenses by 12%.

HBO revenues rose 1% to $1.48 billion — below the $1.52 billion that analysts anticipated. Subscription revenues increased 8%, but content sales fell 44%. HBO’s operating income was up 10% to $531 million with a drop in restructuring and severance costs, and a 3% decline in programming costs due to what it calls “the timing of original series.”

Warner Bros stood out with a 12% increase in revenues to $2.99 billion. In addition to the theatrical success of Wonder Woman, the unit benefited from home entertainment sales for The Lego Batman Movie and carryover from Fantastic Beasts And Where To Find Them.

Still, the studio’s operating income fell 28% to $223 million. Rising film, print and advertising costs depressed the bottom line. In addition, last year included a $90 million gain, mostly from the sale of Flixster to Comcast’s Fandango.