Time Warner comfortably crushed earnings expectations for third quarter 2016, thanks in large part to the box office performances of “Suicide Squad” and “Sully,” a continuation of strong election-cycle TV ratings at CNN, as well as subscription growth from HBO.
Wall Street had forecast earnings per share (EPS) of $1.37 on $6.98 billion in revenue for the company, per a Yahoo Finance consensus. Zacks saw EPS coming in a penny lower. Time Warner’s reported revenue was actually $7.2 billion, up 9 percent overall, while EPS adjusted to $1.83 — 46 percent above the comparable 2015 quarter.
This all should make future parent company (if all goes well) AT&T quite happy. It definitely made Time Warner Chairman and CEO Jeff Bewkes smile — and it even made the boss raise his 2016 outlook.
“We had a strong third quarter, which keeps us on track to exceed our original 2016 outlook and underscores our leadership in creating and distributing the very best content,” Bewkes stated Wednesday in a media release. “In television, HBO took home more Primetime Emmy Awards than any other network for the 15th consecutive year and Time Warner’s divisions won a total of 40 Emmys, more than any other company.”
“CNN’s standout election coverage made it the No. 1 news network in primetime among adults 18-49 for the fourth consecutive quarter and Turner’s momentum doesn’t stop there,” he continued. “Year-to-date, TBS, TNT and Adult Swim are three of the top five ad supported cable networks in primetime among adults 18-49. In film, Warner Bros. had a strong quarter led by Suicide Squad and has the No. 1 release of the fall in Sully, while anticipation is off the charts for J.K. Rowling’s ‘Fantastic Beasts and Where to Find Them,’ which hits the big screen on November 18.”
“The agreement we announced on October 22 to be acquired by AT&T Inc. represents a great outcome for our shareholders and an excellent opportunity to drive long-term value well into the future,” Bewkes concluded. “Combining with AT&T is the natural next step in the evolution of our business and allows us to significantly accelerate our most important strategies.”
AT&T Inc. agreed last month to buy Time Warner Inc. in a cash-and-stock deal worth $85 billion. The deal will create a distribution and content colossus, bringing together premium assets including satellite TV provider DirecTV, cellphone network AT&T Wireless, the Warner Bros. movie and television studios and HBO and Turner cable channels under one, massive corporate roof.
The legacy telephone company will pay $107.50 per share of Time Warner, which values the transaction at $85.4 billion, according to a statement released back then by the companies.
Time Warner executives will host a conference call at 8:30 a.m. ET to discuss the financials further. Most of the Q&A will probably focus on the AT&T deal, however.
For the record: A previous version of this story briefly stated that Time Warner missed on earnings expectations. That was incorrect. TheWrap regrets the error.