Media and entertainment major Time Warner Inc. (TWX), which is in deal to be bought by telecom giant AT&T Inc. (T), on Wednesday reaffirmed its fiscal 2017 business outlook after reporting higher profit and revenues in its second quarter. Adjusted earnings per share topped market estimates, while revenues were in line with their view.
In pre-market activity on the NYSE, Time Warner shares were gaining 1.30 percent to $103.75.
Chairman and Chief Executive Officer Jeff Bewkes said, “Our performance is a result of the continued successful execution of our strategic objectives – with the strong Subscription revenue growth at Home Box Office and Turner a great example of this – along with the investments we’re making in our brands and high-quality video content.”
For the year 2017, the company continues to expect its adjusted operating income to increase in the high single-digits, based on current foreign exchange rates.
Among segments, the company expects Turner’s operating income to increase for the second half as well as for the full year.
Home Box Office’s operating income is expected to increase in the second half.
Further, the company expects Warner Bros.’ operating income growth in the second half to be weighted to the fourth quarter based on the timing of this year’s theatrical releases.
In its second quarter, income attributable to shareholders climbed to $1.06 billion from last year’s $952 million. Earnings per share grew 12 percent to $1.34 from $1.20 a year ago.
Adjusted earnings per share were $1.33, compared to $1.29 for last year’s second quarter. The increase in adjusted earnings primarily reflected lower interest expense, the company said.
Operating income in the quarter decreased 8 percent to $1.7 billion due to declines at Warner Bros. and Turner, partially offset by an increase at Home Box Office. Adjusted operating income was essentially flat at $1.8 billion.
Revenues grew 5 percent to $7.33 billion from $6.95 billion a year ago, due to increases at all operating divisions, partially offset by higher intersegment eliminations.
On average, analysts polled by Thomson Reuters expected earnings of $1.19 per share on revenues of $7.3 billion for the quarter. Analysts’ estimates typically exclude special items.
Turner segment revenues increased 3 percent from last year to $3.1 billion with 13 percent increase in Subscription revenues, partially offset by 6 percent drop in Advertising revenues.
Home Box Office’s revenues increased 1 percent to $1.5…