×

Time Warner third-quarter earnings beat Wall Street’s estimates despite a weaker theatrical film slate and television advertising struggles.

Revenue increased 3% to $6.24 billion versus $6.04 billion in the year-ago quarter, while earnings per share hit $1.22 compared to 91 cents for the same period last year. Excluding a $639 million tax benefit from an audit settlement, earnings per share clock in at 97 cents, still handily beating estimates.

Analysts projected the company would post earnings of 94 cents per share on revenue of $6.16 billion. Lower box-office results and ratings declines, as well as severance and restructuring costs across the film and television empire, held down operating income. It fell nearly 44% to $971 million, as opposed to $1.74 billion in the year-ago period.

Investors seemed pleased with the results, pushing the company’s stock up 2.27% in pre-market trading to $76.67 per share. Time Warner shares closed down 4.81% the previous day in what was a punishing day for big media stocks. Investors are growing concerned that advertisers are turning away from television — a fear exacerbated by Discovery CEO David Zaslav’s comments during an investor call that demand was “softer.”

The earnings announcement comes as Time Warner is undergoing a series of layoffs, eliminating thousands of jobs across Warner Bros., Turner Broadcasting and HBO. During an investor day, Time Warner Chairman and CEO Jeff Bewkes promised to double earnings growth over the next several years. It’s part of an ongoing effort to demonstrate that Time Warner can better deliver for its investors as a stand-alone company than it would as part of another media and entertainment entity. This summer, Time Warner brushed back unsolicited takeover bids from 21st Century Fox.

“As we discussed at our investor event last month, we’ve refocused the company over the past few years to aggressively pursue the huge global opportunities we see in video content,” Bewkes said in a statement accompanying the earnings release. “And once again, we are seeing the benefits of our increased investments in great content and storytelling.”

The company’s film and television unit, Warner Bros., failed to deliver the kind of major movie hits that it did in previous quarters. Its lineup of “Tammy,” “Into the Storm” and “This is Where I Leave You” was a shadow of the previous year’s collection of “The Conjuring,” “We’re the Millers” and “Pacific Rim.” Still, revenue at the unit increased 3% to $2.8 billion, which Warner Bros. attributed to subscription video-on-demand licensing fees for its television shows. Operating income, however, fell 20% to $241 million.

Weaker ad sales and content costs at Turner Broadcasting hurt the division’s performance. Revenue rose 5% to $2.4 billion, even as ad revenue fell 2%. Operating income dropped more steeply, falling 64% to $350 million, which Turner attributed to increased investment in original programming and a new agreement with Major League Baseball. The company is working to revitalize its shows and offerings, signing deals with the National Basketball Association and bringing former NBC and Fox programming head Kevin Reilly on board to reinvigorate the lineup at TNT and TBS.

Time Warner’s premium cable powerhouse HBO saw revenue grow 10% to $1.3 billion, on subscription growth and home-entertainment sales. Operating income at the division fell 24% to $380 million as programming costs climbed 16%. HBO announced last month that it is going to try to take a bite out of the streaming video pie by launching a stand-alone digital service next year.