Time Warner Inc (NYSE:TWX) released its earnings on Wednesday morning which beat both profit and revenue estimates for the quarter. Revenues of $7.33 billion were up over 5% year-over-year and narrowly beat expectations of $7.32 billion. Earnings per share for the quarter totaled $1.33 compared with estimates of $1.19.
The company saw the most growth with its Warner Bros. brand seeing sales rise year-over-year by 12%. The brand saw a rise in video game and theatrical revenue which pushed the strong increase in sales. Particularly, the company notes the release of its Wonder Woman movie was strong and responsible for a big increase in theatrical revenues. However, operating income was down by 28% despite the strong revenue increases as the company saw its operational costs spike due to higher film and advertising expenses.
The company’s cable division, Turner, saw a modest rise of 3% in sales. Although subscription revenues were up over 13% this quarter, advertising revenue was down 6% and other areas saw decreases of 8%. Turner also saw its operating income decrease, as programming costs were up 12% and more than offset the segment’s revenue growth.
Home Box Office (HBO) saw sales narrowly improve by just 1% from the previous year. Despite an increase of 8% in subscriptions, its content and other revenue was down by 44%. However, the segment was able to increase operating income by 10% as a result of lower operational costs.
Time Warner and AT&T are still working towards a merger and hope to see it close before the end of this year. It could be a good opportunity to buy into the stock before that happens.
