Time Warner Reports Higher 2Q Net Income

Time Warner, preparing for being bought by AT&T, said its second-quarter profits were up 11% as subscription revenue rose at Turner and HBO.

Net income rose 10% to $1.06 billion, or $1.34 per share, from $952 million, or $1.20 per share, a year ago.

Revenues rose 5% to $7.3 billion.

The results topped Wall Street forecasts.

The company said it continues to expect its acquisition by AT&T to close before the end of this year.

Time Warner also reaffirmed its full-year earning guidance.

Related: AT&T Names Stankey to Run Media Company After Time Warner Acquisition

At Turner, operating income was down 7% to $1.1 billion because of higher expenses. Programming costs were up 12% mostly because of the new licensing deal with the NBA.

Turner’s revenues were up 3% to $3.1 billion. Subscription revenue was up 13%.

Advertising revenues were down 6% and content revenue was down 8%. The company said not having the NCAA Championship and Final Four games this year cost it 8% worth of ad revenues. It also had two fewer NBA playoff games and lower ratings at its domestic entertainment networks. Ad revenues were up at CNN and Turner’s international networks.

At HBO, operating income increased 10% to $531 million as programming costs declined 3%.

Revenues increased 1% at HBO. Subscription revenues were up 8%, while content and other revenue were down 44%.

Warner Bros. operating income was down 28% to $233 million from last year when Flixster was sold. Adjusted operating income was up 20% to $261 million.

Revenues were up 12% to $3 billion as higher theatrical revenues were partly offset by lower TV revenues.

“We’re very pleased with our first-half results, which keep us on track to achieve our objectives for the year,” said CEO Jeff Bewkes. “Our performance is a result of the continued successful execution of our strategic objectives—with the strong Subscription revenue growth at Home Box Office and Turner a great example of this—along with the investments we’re making in our brands and high-quality video content.”

Bewkes noted the box office numbers for the films Wonder Woman and Dunkirk and the Emmy award nominations earned by HBO and Warner Bros.

“These results and accolades reflect strong execution and the investments we’ve been making, both in the best content and in ensuring that we deliver our content across platforms to offer engaging experiences for our audiences,” he said. “Accelerating our pace of innovation and being able to connect more directly with consumers are among the exciting reasons for our proposed merger with AT&T, which remains on track to close before year end, pending regulatory review and consents.”

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.