Time Warner Inc., which two weeks ago agreed to sell itself to AT&T Inc., boosted its outlook for the year as improvement in its TV and film businesses pushed quarterly results above expectations.
Revenue increased in all three of the company's segments--8.8% for Turner, 4.3% for Home Box Office and 6.6% for Warner Bros.
In film, Warner Bros.'s performance improved led by "Suicide Squad" and "Sully," while the company said anticipation is "off the charts" for J.K. Rowling's "Fantastic Beasts and Where to Find Them," which hits the big screen later this month. The company also pointed to election coverage that helped push its CNN to the No. 1 news network in primetime among adults 18-49.
Shares rose 2% premarket.
AT&T late last month reached a deal to buy Time Warner for $85.4 billion, which would transform the phone company into a media giant. The companies anticipate the transaction?for $107.50 a share, evenly split between cash and stock?to close by the end of 2017.
The combined business would pair the carrier's millions of wireless and pay-television subscribers with Time Warner's deep media lineup, which includes networks such as CNN, TNT, the prized HBO channel and Warner Bros. film and TV studio. It furthers AT&T's bet that television and video can drive growth into a stalled wireless market.
New York-based Time Warner has been grappling with subscriber declines as more people cut the cable cord and opt for online streaming. In an effort to turn the tide, Time Warner last year launched HBO Now, its stand-alone streaming service for the channel featuring popular shows such as Game of Thrones.
For the September quarter, Time Warner reported a profit of $1.47 billion, or $1.86 a share, up from $1.04 billion, or $1.26, a year earlier. Excluding certain items, per-share profit rose to $1.83 from $1.25. Analysts polled by Thomson Reuters had expected adjusted earnings of $1.37
Revenue climbed 9.2% to $7.17 billion, topping the $6.98 billion analysts were looking for.
For the year, Time Warner now expects to post $5.73 to $5.83 in adjusted earnings per share, including a 28-cent net tax benefit recognized in the third quarter related to a change in a tax-accounting method. Minus that benefit, the outlook for 2016 adjusted earnings would be $5.45 to $5.55?still a healthy raise from the previous forecast for $5.35 to $5.45.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
November 02, 2016 08:15 ET (12:15 GMT)
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