Time Warner Beats Q4 Expectations Thanks To ‘Justice League,’ Turner And HBO

Time Warner
Associated Press

Time Warner, whose corporate fate will be known in the coming weeks, reported better-than-expected fourth-quarter earnings due to Justice League box office and continued growth at Turner and HBO.

Total revenue grew 9% from the year-ago quarter to $8.6 billion. Operating income increased 13% to $1.9 billion.

Justice League, a November release which capped off a record-setting 2017 for the studio, has pulled in $656 million worldwide.

As it awaits the outcome of the Department of Justice’s lawsuit against AT&T seeking to block its acquisition of Time Warner, the company skipped the customary conference call with Wall Street analysts to discuss the quarterly results. In the earnings press release, CEO Jeff Bewkes touted both the quarterly and the full-year numbers, saying the company had met all of its performance targets.

“All three of our operating divisions increased revenue and profits,” he said, “while also investing to capitalize on the growing demand for the most creative and compelling content as well as new ways to deliver it to audiences worldwide.”

Revenue at Warner Bros. increased to $4.05B from $3.87B a year ago. Turner’s went up to $3.12B from $2.84B on the strength of international and better ad revenue due to Major League Baseball playoff broadcasts. HBO revenue hit $1.68B from $1.49B on healthy 29% margins and the company predicted the premium network’s subscription revenue would increase by 11%, in line with its full-year 2017 uptick.

Time Warner shares are up more than 5% year to date, having regained the ground they lost during last fall’s chaos surrounding the lawsuit. They picked up almost 2% on the day to close at $97.

Pivotal Research analyst Brian Wieser praised the “solid outperformance at Turner and HBO and a better-than-expected bottom line earnings per share result.” He reiterated his assumption that the AT&T transaction will eventually be completed and his buy rating on the stock.

MoffettNathanson’s Michael Nathanson, who upgraded Time Warner stock to a buy yesterday, sent out a followup note today saying the earnings news attests to the company’s value as a stand-alone entity. “If nothing else, this morning’s release (specifically, the 2018 guidance) gives us increased confidence that the fundamentals at all three of Time Warner’s business units remain strong,” he said.

The DoJ lawsuit has a trial date of March 19. “We remain excited about the proposed merger with AT&T, pending judicial review,” Bewkes said, “and the potential to accelerate our pace of innovation and connect more directly with consumers.”

This article was printed from https://deadline.com/2018/02/time-warner-beats-q4-expectations-powered-by-justice-league-1202276054/