Time Warner Earnings Lifted by HBO

NEW YORK: Revenue was up 3 percent at Time Warner in the third quarter to $6.2 billion, led by subscription revenue growth from its Turner networks and HBO.

Net income for Q3 was $967 million, down from the $1.2 billion reported a year ago.

Within its Turner networks, revenues rose 5 percent to $2.4 billion, with 10 percent growth in subscription revenues and 17 percent growth in content revenues. This was partially offset by a 2 percent decline in ad revenues. The gain in subscription revenues was primarily due to higher domestic rates and international growth. Ad revenues were down due to declines in Turner's international networks, with ad revenues at the domestic nets essentially flat. Operating income decreased 65 percent to $337 million.

HBO saw revenues increase 10 percent to $1.3 billion, with a 10 percent hike in subscription revenues and 7 percent gain in content revenues. The subscription revenues were a result of higher domestic rates and subscribers, as well as the consolidation of HBO Asia and HBO South Asia. The gain in content revenues was primarily due to increases from home video. Operating income was down 24 percent to $380 million.

Revenues were up 3 percent for the Warner Bros. studio to $2.8 billion, with growth in SVOD revenues for TV product, higher licensing of theatrical product, growth in TV production and revenues from a patent license and settlement agreement. This helped make up for lower performance from the theatrical releases, which faced a tough comparison with the prior year's slate and lower domestic off-network TV license fees. Operating income was down 23 percent to $237 million.

Time Warner has updated its full-year outlook, now expecting adjusted earnings percentage growth in the high teens, up from a previous forecast of growth in the low teens.

Jeff Bewkes, the chairman and CEO, said: “We had another good quarter, featuring solid revenue growth as well as strong growth in Adjusted EPS. As we discussed at our investor event last month, we’ve refocused the company over the past few years to aggressively pursue the huge global opportunities we see in video content. And once again, we are seeing the benefits of our increased investments in great content and storytelling. In the quarter, both Turner and HBO had double-digit increases in subscription revenues, reflecting the growing strength and appeal of their programming. HBO received 19 Primetime Emmy Awards, the most of any network for the 13th straight year, including five Emmys for newcomer True Detective. At Turner, TNT ranked as ad-supported cable’s number one prime-time network for the second consecutive quarter, TBS was the number two ad-supported cable network in primetime among adults 18-49 and 25-54, and Adult Swim again shined as ad-supported cable’s number one total day network among its key adult demos. Turner’s extension last month of its longstanding relationship with the NBA through the 2024-25 season is another great example of investing in distinctive programming that will serve us well for years to come. This fall, Warner Bros. is once again the number one producer for broadcast television, including a strong slate of new shows. Season-to-date, Gotham ranked as broadcast’s number two new show among adults 18-49, while The Flash had the most-watched telecast ever on The CW. These shows are among five series featuring DC characters that will air this season. DC is also a key component of the ambitious film slate that Warner Bros. recently unveiled. Further demonstrating our continuing commitment to shareholder returns, so far this year we’ve returned over $5.7 billion to our shareholders in the form of share repurchases and dividends.”