HBO, Turner Lift Time Warner Earnings

HBO and Turner Networks boosted earnings at Time Warner during the first quarter of 2016, offsetting declines in the media conglomerate’s film unit.

Revenues at the film and television company rose 3% to $7.3 billion, up from $7.1 billion a year ago. Operating income climbed 12% to $2 billion, while adjusted earnings topped out at $1.49 per share, an improvement on the $1.19 per share in the prior year period. Profits beat Wall Street’s expectations, while revenue was in line with estimates. Analysts, on average, were projecting earnings per share of $1.29 and revenue of $7.3 billion.

“We’re off to a terrific start to 2016, as we benefit from the investments we’ve been making in great content and new capabilities in order to take advantage of the growing demand for high-quality video content around the world,” said Jeff Bewkes, Time Warner’s chairman and CEO, in a statement.

Revenues at HBO, the premium channel behind “Girls” and “Game of Thrones,” increased 8% to $1.5 billion, due to subscription growth. Operating income rose 4% to $477 million. HBO has recently launched a standalone streaming service, dubbed HBO Now, which it hopes will attract customers who primarily access video content through the internet.

Turner, which includes TBS and CNN in its suite of brands, also had a strong quarter. Revenues increased 7% to $2.9 billion and operating income rose 10% to $1.2 billion due to improved subscription and advertising results. The presidential election has been boon to CNN’s ratings, helping the cable network goose viewership and double its primetime audience as candidates such as Donald Trump and Hillary Clinton have traded barbs.

Warner Bros., however, suffered declines. The studio’s big blockbuster, “Batman v Superman: Dawn of Justice,” failed to match the combined success of “American Sniper” and “The Hobbit: The Battle of the Five Armies,” both of which made much of their money during the year-ago quarter. The superhero match-up debuted during the final week of the quarter, so a large percentage of its receipts won’t be recorded until the second fiscal period. Revenues decreased 3% to $3.1 billion on softer theatrical results, but operating income did improve, increasing 31% to $424 million. The higher profitability was partly attributable to decreases in film advertising costs.

“Batman v Superman” was excoriated by critics, but grossed over $860 million worldwide at the box office. It is intended to establish an interconnected cinematic universe populated by DC Comics superheroes and villains. The next installment, “Suicide Squad,” hits theaters in August.

Shares of Time Warner closed Tuesday down 2.23% at $73.64.

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