Time Warner Q2 Results Beat View, Reaffirms 2015 Earnings Outlook

(RTTNews) - Media and entertainment giant Time Warner, Inc. (TWX) on Wednesday reported a 14 percent increase in profit for the second quarter from last year, reflecting higher revenues across all three segments.

Both revenue and adjusted earnings per share topped analysts' expectations. The company also reaffirmed its adjusted earnings forecast for fiscal 2015.

Chairman and CEO Jeff Bewkes said, "Our results were led by Turner and Warner Bros., and were achieved at a time when we're investing aggressively to position the company for continued growth, including the successful launch of HBO NOW, our standalone domestic streaming service."

Turner reported a surge in content and other revenues for the quarter due to the licensing of select Turner original programming to video-streaming service Hulu.

At Warner Bros, videogame revenues increased during the quarter, primarily due to the releases of "Batman: Arkham Knight" and "Mortal Kombat X." Television licensing revenues benefited from the second-cycle syndication of "The Big Bang Theory" and the subscription video-on-demand licensing of "Seinfeld."

New York-based Time Warner, which also owns cable channels CNN, HBO and TNT, reported net income for the second quarter of $971 million or $1.16 per share, up from $850 million or $0.95 per share in the prior-year quarter.

Excluding certain items, adjusted income from continuing operations for the quarter was $1.25 per share, compared to $0.98 per share in the year-ago quarter.

On average, 31 analysts polled by Thomson Reuters expected the company to report earnings of $1.03 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter grew 8 percent to $7.35 billion from $6.79 billion in the same quarter last year, amid growth across all operating divisions. Analysts' consensus revenue estimate was $6.90 billion.

Turner revenues grew 3 percent from the year-ago period to $2.83 billion, aided by a 2 percent rise in subscription revenues and 48 percent growth in content and other revenues. These were partly offset by a 1 percent decline in advertising revenues.

Home Box Office revenues increased 1 percent to $1.44 billion, reflecting an increase of 4 percent in subscription revenues, partly offset by a 7 percent decline in content and other revenues.

Warner Bros revenues improved 15 percent to $3.30 billion, reflecting higher videogames and television licensing revenues, partially offset by lower theatrical revenues and the impact of foreign exchange rates.

Operating margin for the quarter expanded 220 basis points from last year to 25.3 percent.

Time Warner's board of directors declared a regular quarterly cash dividend of $0.35 per share of common stock. The dividend is payable in cash on September 15, 2015 to shareholders of record on August 31, 2015.

Looking ahead to fiscal 2015, Time Warner affirmed its outlook for adjusted income from continuing operations in a range of $4.60 to $4.70 per share. The Street is currently looking for full-year earnings of $4.66 per share.

TWX closed Tuesday's trading at $87.65. In Wednesday's pre-market activity, the stock is down $1.40 or 1.6 percent to $86.25.