A lot of things worked for Time Warner in Q1 as political junkies tuned in to CNN and superhero fans lined up for Batman Vs. Superman: Dawn of Justice. And they paid off with earnings results, out this morning, that beat Wall Street’s expectations — helping to lift the share price by about 1.5% in pre market trading.
The company generated $1.21 billion in net income, up 25.2% vs the period last year, on revenues of $7.31 billion, up 2.5%. Analysts thought the top line would be a little lower, at $7.30 billion. But adjusted earnings, at $1.49 a share, were well ahead of forecasts for $1.30.
“We’re off to a terrific start to 2016, as we benefit from the investments we’ve been making in great content and new capabilities in order to take advantage of the growing demand for high-quality video content around the world,” CEO Jeff Bewkes says. CNN more than doubled its prime time audience in the quarter he noted.
Turner, the company’s main profit generator, saw operating income increase 11.8% to $1.24 billion, although the comparison is colored by a $17 million charge the company took last year when it revalued its Venezuelan assets. Revenues increased 7.2% to $2.91 billion. Subscription revenues were up 11% — helped by price hikes although somewhat offset by a drop in domestic subs and weakening exchange rates for overseas sales.
Ad sales rose 5%, about where analysts expected. Time Warner says that it saw the biggest growth in the U.S., especially at CNN.
Warner Bros’ bottom line was helped by the lower costs it faced as it cut back on releases. Operating income was up 30.9% to $424 million while revenues declined 2.8% to $3.11 billion.
Most of the increases were due to TV and video game sales, while theatrical revenues declined. Although Batman Vs. Superman did well at box offices, it was released late in the quarter while last year’s numbers were helped by American Sniper and The Hobbit: The Battle Of The Five Armies, released in late 2014.
HBO’s numbers improved, roughly in line with analyst expectations. Operating income was up 4.2% to $477 million with revenues up 7.7% to $1.51 billion. Subscription revenues were up 5%, with increases both in prices and customers. Content sales were up 23%, mostly overseas.