Time Warner, preparing for its acquisition by AT&T, said its second-quarter profit was 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. Revenue rose 5% to $7.3 billion.
The results topped Wall Street forecasts.
Time Warner said it continues to expect the AT&T deal to close before the end of this year. The company also reaffirmed its full-year earning guidance.
At Turner, revenue rose 3% to $3.1 billion. Subscription revenue was up 13%. 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 advertising revenue was 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 revenue. It also had two fewer NBA playoff games and lower ratings at its domestic entertainment networks. Ad revenue increased at CNN and Turner’s international networks.
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At HBO, operating income increased 10% to $531 million as programming costs declined 3%. Revenue rose 1%, with subscription revenue up 8%, while content and other revenue was down 44%.
“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.”
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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. Revenue rose 12% to $3 billion as higher theatrical revenues were partly offset by lower TV revenue.
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.”
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