Time Warner Income Slips Despite Turner, HBO Gains

Ad revenue down 4%

Time Warner, preparing to be acquired by AT&T, reported gains at all of its operating units but reported lower third-quarter profits because of a tax gain a year ago.

Net income dipped to $1.372 billion, or $1.73 per share, in the quarter from $1.467 billion, or $1.86 per share, a year ago. The company had a tax benefit worth 28 cents per share a year ago.

Revenue rose 6% to $7.6 billion.

The results topped Wall Street forecasts.

At Turner, operating income increased 7% to $1.2 billion as revenue rose, offset by increased programming and marketing costs. Programming expenses were up 8% because of an increase in original programming on Turner’s domestic entertainment networks, the company said.

Turner revenue was up 6% to $2.8 billion. Subscription revenue was up 13%. Advertising revenue was down 3% because of lower delivery at certain domestic networks.

Operating income was up 4% at HBO. Revenue growth offset higher marketing and programming costs; programming costs were up 6%.

HBO revenue increased 13%, including a 12% increase in subscription revenue.

“We delivered very strong third-quarter results, keeping us on track to achieve our objectives for 2017," said CEO Jeff Bewkes. "Both Turner and Home Box Office achieved double-digit gains in subscription revenues, including HBO’s highest quarterly growth in 13 years, while Warner Bros. had a terrific quarter in theatrical.

“The ability to accelerate our pace of innovation and connect more directly with consumers are among the reasons we are excited about our proposed merger with AT&T, which remains on track to close before year end, pending regulatory review and consents," Bewkes added.