In what is likely its last quarter as a stand-alone company before merging with AT&T, Time Warner reported strong results across all of its divisions, especially HBO, Turner and Warner Bros., with operating income up 11% and revenue up 6%.
Chairman and CEO Jeff Bewkes, who has led the company’s evolution into a film and TV content powerhouse, shedding AOL, music, books, magazine publishing and a cable system stake along the way, did not elaborate on the results for the quarter ending September 30. The company declined to hold a conference call for analysts and investors, citing the pending merger with AT&T and reiterating its line that the $85 billion megadeal is on track to close by the end of 2017.
Total revenues grew 6% to $7.6 billion and operating Income increased 11% to $2.2 billion. There were bright spots in every division.
HBO, coming off a 16th straight Emmy season with the most wins of any network, had its highest quarterly subscription revenue growth in 13 years, up 12% to $156 million. Total HBO revenue increased 13% to $1.6 billion due to the subscription gains and a 14% rise in content and other revenues.
The premium network’s revenue upswing offset higher expenses for both marketing and programming. Costs for programming increased 7%, which the company blamed on the timing of original series. The rise in marketing costs was attributed to OTT products and original programming.
Warner Bros. also had a stellar quarter, with film hits including It, Annabelle: Creation, Dunkirk and Wonder Woman, though TV revenue was softer. Revenue rose just 2% to $3.5 billion, but operating income shot up 26% to $538 million due to more efficiency at the box office, with higher revenue but fewer releases and, hence, lower P&A expenses.
Turner revenue increased 6% to $2.8 billion, as subscription revenue gained 13%.