Time Warner Rides HBO, March Madness To Strong Results

(RTTNews) - Media and entertainment giant Time Warner, Inc. (TWX) reported Wednesday a profit for the first quarter that declined from last year, which was boosted by hefty gains on operating assets.

However, adjusted earnings per share from continuing operations and quarterly revenues topped analysts' expectations amid growth across all operating divisions.

Turner Networks performed particularly well, drawing viewers for the NCAA Men's Basketball Tournament "March Madness."

HBO's hot streak continued thanks in part to a buzz-generating season premier of hit show "Game of Thrones."

The company also reaffirmed adjusted earnings forecast for the full-year 2015.

"We got off to a very strong start in 2015, with Revenues up 5%, and Adjusted Operating Income growing 12% to a quarterly record of $1.8 billion. This led to a 23% increase in Adjusted EPS and puts us on track to achieve our goals for the year. We accomplished a lot in the quarter, led by Turner, which had its best quarter ever, with audience growth across a number of its networks," Chairman and CEO Jeff Bewkes said in a statement.

The New York-based company reported net income of $970 million or $1.15 per share for the first quarter, lower than $1.29 billion or $1.42 per share in the prior-year quarter.

Income per common share from continuing operations declined to $1.10 from last year's $1.50, which included a hefty gain on operating assets.

Excluding certain items, adjusted income from continuing operations for the quarter was $1.01 billion or $1.19 per share, compared to $885 million or $0.97 per share in the year-ago quarter.

On average, 31 analysts polled by Thomson Reuters expected the company to report earnings of $1.09 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter increased 5 percent to $7.13 billion from $6.80 billion in the same quarter last year, amid growth across all divisions. and topped twenty-eight Wall Street analysts' consensus estimate of $7.0 billion.

Turner revenues grew 5 percent to $2.71 billion, aided by a 4 percent growth in advertising revenues, a 3 percent rise in subscription revenues, and a 25 percent boost in Content and other revenues.

Home Box Office revenues increased 4 percent to $1.40 billion, reflecting increases of 4 percent in subscription revenues and 5 percent in content and other revenues.

Warner Bros revenues improved 4 percent to $3.20 billion, driven by higher television licensing revenues primarily due to the subscription video-on-demand sale of Friends and higher revenues from videogames. Revenues also benefited from growth in theatrical revenues led by the strong performance of American Sniper, which brought in well over $500 million globally.

Operating margin for the quarter contracted 500 basis points to 25.1 percent from last year's 30.1 percent.

Looking ahead to fiscal 2015, Time Warner said it continues to expect adjusted Income from continuing operations in the range of $4.60 to $4.70 per share. Street is currently looking for full-year 2015 earnings of $4.65 per share.

In Wednesday's regular trading session, TWX is currently trading at $85.87, up $0.89 or 1.04% on a volume of 0.39 million shares. In the past 52-week period, the stock has been trading in a range of $60.81 to $88.25.