Time Warner’s quarterly earnings beat Wall Street estimates on Wednesday, propelled by film hits, a water-cooler winner in the HBO drama “Big Little Lies, and stronger interest in the NCAA Basketball games it aired.
Revenues climbed 6% to $7.74 billion, while adjusted earnings per share topped out at $1.66, up from $1.49 in the year-ago period. Adjusted operating income for the three month period ending in March rose 7% to $2.2 billion. Analysts had projected that the media company would post earnings of $1.44 a share on revenue of $7.66 billion.
The strong results emerged as Time Warner is awaiting government approval for its $85.4 billion sale to AT&T. The conglomerate owns Warner Bros., CNN, HBO, and the Turner cable networks. AT&T and Time Warner’s leadership have both stated that the expect the deal will close by the end of 2017.
In a statement, Time Warner CEO Jeff Bewkes said, “We remain excited about the potential for this combination to accelerate the pace of innovation in our businesses.”
Among the various Time Warner divisions, Turner showed signs of weakness the could cloud an otherwise robust quarter. It scored with NCAA basketball finals, enjoying the second most-watched college tournament in 23 years. Yet, ad sales fell 2% on overall ratings declines and a dip in subscribers. Revenues in the unit increased 6% to $3.1 billion even as operating income fell 6% to $1.2 billion.
“Big Little Lies,” a buzzy limited series with Reese Witherspoon and Nicole Kidman, was a big factor in HBO’s strong performance. The show averaged 8 million viewers and generated a rabid social media following. Revenues at the premium cable channel increased 4% to $1.6 billion due to a rise in subscriptions and lower programming costs, while operating income in the division jumped 22% to $583 million.
Warner Bros. benefited from some big screen success, as both “Kong: Skull Island” and “The Lego Batman Movie” connected with audiences. Revenues at the film, video game, and television division increased 8% to $3.4 billion, while adjusted operating income jumped 20% to $510 million.