Time Warner Q3 Results Top Estimates, Boost 2014 Outlook

(RTTNews) - Media and entertainment giant Time Warner, Inc. (TWX) reported Wednesday a profit for the third quarter that declined from last year, which was boosted by gains from discontinued operations. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also raised adjusted earnings growth forecast for the full-year 2014.

"We had another good quarter, featuring solid revenue growth as well as strong growth in Adjusted EPS. As we discussed at our Investor Event last month, we've refocused the Company over the past few years to aggressively pursue the huge global opportunities we see in video content. And once again, we are seeing the benefits of our increased investments in great content and storytelling" Chairman and CEO Jeff Bewkes said in a statement.

The New York-based company reported net income of $967 million or $1.11 per share for the third quarter, lower than $1.18 billion or $1.26 per share in the prior-year quarter.

Earnings from continuing operations for the quarter grew to $1.11 per share from last year's $1.02 per share.

Excluding certain items, adjusted income from continuing operations for the quarter was $1.06 billion or $1.22 per share, compared to $855 million or $0.91 per share in the year-ago quarter.

On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $0.94 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter increased 3 percent to $6.24 billion from $6.04 billion in the same quarter last year, due to growth across all segments, and topped twenty-three Wall Street analysts' consensus estimate of $6.16 billion.

Turner revenues for the quarter grew 5 percent to $2.45 billion, driven by growth of 10 percent in subscription revenues, and 17 percent in content revenues, partly offset by a 2 percent decline in advertising revenues.

Home Box Office or HBO, revenues increased 10 percent to $1.30 billion, reflecting increases of 10 percent in subscription revenues and 7 percent in content revenues.

Warner Bros. revenues improved 3 percent to $2.78 billion, mainly due to growth in subscription video-on-demand revenues for television product, higher licensing of theatrical product, and growth in television production.

Restructuring and severance costs for the quarter was $303 million, compared to $56 million last year.

Operating margin for the quarter contracted 13 percentage points to 15.6 percent from last year's 28.6 percent.

Separately, Time Warner said it now expects full-year 2014 percentage growth rate for adjusted income per share from continuing operations to be in the high teens from the fiscal 2013 adjusted earnings per share base of $3.51. Street is currently looking for full-year 2014 earnings of $4.01 per share.

The company previously projected adjusted income per share from continuing operations to grow in the low teens.

TWX closed Tuesday's regular trading session at $74.97, down $2.74 on a volume of 10.12 million shares. In the past 52-week period, the stock has been trading in a range of $58.22 to $88.13.