Time Warner reported a big gain in third-quarter profits after agreeing to be acquired by AT&T.
Net income rose 42% to $1.47 billion, or $1.89 a share, from $1.04 billion, or $1.27 a share a year ago.
Revenues rose 9% to $7.2 billion in the quarter.
The results exceeded Wall Street expectations.
“We had a strong third quarter, which keeps us on track to exceed our original 2016 outlook and underscores our leadership in creating and distributing the very best content,” said CEO Jeff Bewkes.
“The agreement we announced on October 22 to be acquired by AT&T Inc. represents a great outcome for our shareholders and an excellent opportunity to drive long-term value well into the future,” Bewkes added. “Combining with AT&T is the natural next step in the evolution of our business and allows us to significantly accelerate our most important strategies.”
Time Warner also increased its business outlook for the full year, saying that it now expects adjusted diluted income per common share from continuing operation to be in the $5.73 to $5.83 range. That includes a 28 cent benefit relating to a tax accounting change.
Operating income at Turner Broadcasting rose 8%, despite a 5% increase in programming costs at CNN resulting from coverage of the presidential election.
Turner’s revenues were up 9% to $2.6 billion. Subscription revenue rose 12%, and content revenue was up 33%. Advertising revenue was up 2%, with gains at the news networks offsetting lower revenue due to falling ratings at some domestic entertainment networks.
At HBO, operating income rose 2% to $530 million. Programming costs rose 15%, reflecting higher costs for acquired movies and increased spending on original series.
HBO revenues rose 4% to $1.4 billion, with a 5% increase in subscription revenues. Content revenues fell 2%.
Operating income at Warner Bros. increased 11% to $428 million. Revenues were up 7% because of good box office results from films Suicide Squad, The Legend of Tarzan, Sully and Lights Out.
