Higher adjusted operating income and share repurchase activity cushioned the bottom line. The company continues to expect 2015 adjusted earnings per share from continuing operations to be in the $4.60-$4.70 range. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 7 cents per share. Finally, Zacks upgraded shares of Time Warner from a “hold” rating to a “buy” rating and set a $98.00 price objective for the company in a report on Tuesday, July 7th.
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Time Warner strategy has in the recent past shifted its focus to creating original hit shows. The profit increase was driven by a 45% decline in programming costs, mainly because in the year-prior quarter the company took a $482 million write-down “related to Turner’s decision to no longer air certain programming”. US advertising revenue was flat in the quarter. “The increase in content and other revenues primarily reflected higher domestic licensing revenues”. The sales number beat analysts’ consensus forecast for $6.51 billion. The company also cut expenses from layoffs and garnered lower distribution and programming costs.
Revenue at HBO surged 4.8 percent to $1.37 billion, while revenue at Warner Bros. surged around 15 percent to $3.2 billion. Video games helped boost WB, as the release of “Lego Dimensions ” and “Mad Max” delivered gains. WB’s TV licensing revenues benefited in Q3 from the initial cable and off-network availability of “2 Broke Girls” and the initial cable availability and SVOD licensing of “Person of Interest”.
Adjusted operating income for the division soared 61% to $388 million on the back of higher revenues, partly offset by increased print and advertising expenditures.
Based on its results, TW on Wednesday reaffirmed its 2015 full-year guidance.
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At Turner, revenue dropped 2% to $2.4 billion, but operating income more than tripled, to $1.1 billion. The media conglomerate reported $1.25 EPS for the quarter, topping the consensus estimate of $1.09 by $0.16, MarketBeat Ratings reports. The total amount of the transaction was worth $1,593,750, according to the disclosed information with the Securities and Exchange Commission in a Form 4 filing.
