Time Warner investors mostly want to know that its $85 billion sale to AT&T is on track. But in the meantime, they’ll likely be reassured to know that the company is performing at least as well as expected — and, in Q4, a bit better.
The entertainment giant this morning reported $293 million in net income in the quarter — factoring in about $1 billion in outlays for debt repurchases — down from $857 million last year, on revenues of $7.89 billion, up 11.5%. Analysts had been looking for $7.72 billion on the revenue line.
After taking out the debt payments, earnings came in at $1.25 a share, ahead of the Street’s expectation of $1.19.
CEO Jeff Bewkes says that all divisions “increased revenue and profits while also making investments to capitalize on the growing demand for the very best video content and new ways to deliver it to audiences around the world.” Helped by Fantastic Beasts and Where To Find Them, Warner Bros “had its second-best year ever at the global box office.”
Time Warner and AT&T “remain on track to close the transaction later this year,” he adds.
At the Turner cable networks, operating income increased 8.2% to $841 million on revenues of $2.84 billion, up 6.7%. Ad sales fell 2% — with domestic sales flat — as strong election period results for CNN couldn’t completely outweigh ratings drops at the entertainment networks. Subscription revenues were up 14% with rate hikes offsetting “lower domestic subscribers.”
The successful launch of Westworld plus rate hikes helped HBO to list operating income 9% to $429 million with revenues up 6% to $1.5 billion.
Warner Bros.’ operating income was up 56.8% to $574 million on revenues of $3.87 billion, up 17.0%. The company says the gains are “mainly due to higher theatrical revenues” which included Fantastic Beasts and The Accountant.