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Time Warner Q1 revenue up 3% to $7.3 bn
MUMBAI: US media conglomerate Time Warner has reported financial results for its first quarter ended 31 March 2016.
Revenues are up by 3% to $7.3 billion. Adjusted operating income grew by 11% to a record $2 billion. Turner’s subscription revenues increased by 11%. Adjusted EPS rose by 25% to $1.49
The company repurchased 13 million shares for $946 million year-to-date through 29 April 2016.
Chairman, CEO Jeff Bewkes said, “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. Revenues increased three per cent and Adjusted Operating Income grew 11% to a quarterly record of $2 billion due to strong growth across all our operating divisions. In the past several weeks, we’ve seen Warner Bros. release its latest global hit in ‘Batman v Superman: Dawn of Justice’, setting the stage for what we expect to be a big year in film, with upcoming releases including ‘Suicide Squad’ and ‘Fantastic Beasts and Where to Find Them’.
“In television, Warner Bros. continued to show its strength with three of the top five new shows on broadcast television this season among adults 18-49 and a record 21 renewals ahead of the upfront this year. Turner aired cable’s first ever NCAA Men’s Division I Basketball Championship game, and Turner and CBS entered into an agreement with the NCAA to extend their television, digital and marketing rights to the NCAA Tournament through 2032. TBS ended the quarter as the #1 ad-supported cable network in primetime among adults 18-49 and its repositioning as cable’s premier network for young, fresh comedy is underway with the introduction of new programming including ‘Angie Tribeca’, ‘Full Frontal with Samantha Bee’ and ‘The Detour’, the biggest new comedy on cable this year. With its must-watch coverage of the U.S. Presidential campaign, CNN continued to build on its success by more than doubling its primetime audience in the quarter.
Meanwhile, HBO continued to make strides both inside and outside the traditional TV ecosystem, including expanding its OTT reach to new platforms and new international territories. And, more recently, HBO’s epic series Game of Thrones returned to record premiere night viewership. Further demonstrating our commitment to shareholder returns, we returned close to $1.3 billion to our shareholders through share repurchases and dividends year-to-date.”
Company results: Revenues increased by 3% to $7.3 billion due to growth at Turner and Home Box Office, partially offset by a decline at Warner Bros. Revenues included the unfavorable impact of foreign exchange rates of approximately $115 million in the quarter. Adjusted operating income grew 11% to $2.0 billion due to growth across all operating divisions, partially offset by higher corporate expenses. Operating Income increased 12% to $2.0 billion.
Revenue increased by 7% ($196 million) to $2.9 billion, due to increases of 11% ($143 million) in subscription revenues and 5% ($56 million) in ad revenues. Subscription revenues increased due to higher domestic rates and local currency growth at Turner’s international networks, partially offset by the impact of foreign exchange rates and lower domestic subscribers.Advertising revenues benefited from domestic growth, primarily due to Turner’s news business, and local currency growth at Turner’s international networks, partially offset by the impact of foreign exchange rates.
Adjusted operating income increased by 10% ($111 million) to $1.2 billion, primarily due to higher revenues, partially offset by higher expenses, including increased programming and marketing costs. Programming costs grew 4% primarily due to higher sports costs. The increase in marketing costs primarily relates to recently premiered and upcoming original series associated with the TBS rebrand.
Operating income increased by 12% ($131 million) to $1.2 billion. The prior year quarter included a $17 million foreign currency charge related to the remeasurement of Turner’s net monetary assets denominated in Venezuelan currency.
During the first quarter of 2016, TBS ranked as the #1 ad-supported cable network in primetime among adults 18-49. TBS’The Detour ranked as cable’s #1 new comedy series among adults 18-49 year-to-date. Adult Swim ranked #1 in total day on ad-supported cable among key adult and male demographics. In the first quarter, CNN grew its primetime ratings by 137% and 159% among adults 25-54 and total viewers, respectively. In March 2016, Turner and CBS entered into an agreement with the National Collegiate Athletic Association to extend their television, digital and marketing rights to the NCAA Division I Men’s Basketball Championship Tournament through 2032.
Revenue increased by 8% ($108 million) to $1.5 billion, due to increases of 5% ($57 million) in subscription revenues and 23% ($51 million) in content and other revenues. Subscription revenues grew primarily due to higher domestic rates and subscribers. The increase in content and other revenues primarily reflected higher international licensing revenues, partially offset by lower home entertainment revenues.
Adjusted operating Income increased 6% ($28 million) to $486 million, reflecting higher revenues, partly offset by higher programming, marketing and technology costs. Programming costs increased by 11% primarily reflecting higher original programming costs. The higher marketing and technology costs related to HBO Now, HBO’s over-the-top (OTT) service.
Operating income increased by 4% ($19 million) to $477 million. The sixth season premiere of ‘Game of Thrones’ grew its opening night viewership double digits compared to a year ago on a cross platform basis. In February, HBO’s ‘A Girl in the River: The Price of Forgiveness’ received an Academy Award for Documentary Short Subject. HBO Latin America Group launched an OTT service in Mexico in January 2016. HBO also announced plans for future OTT launches in Brazil, Argentina and Spain. Domestically, HBO recently launched HBO NOW on Microsoft’s Xbox platforms and new Samsung smart TVs.
Revenue decreased by 3% ($90 million) to $3.1 billion, mainly due to lower theatrical revenues, partially offset by higher television and videogames revenues. Theatrical revenues declined as the prior year quarter included revenues from ‘American Sniper’ and ‘The Hobbit: The Battle of the Five Armies’ compared to the release of ‘Batman v Superman: Dawn of Justice’ late in the current year quarter. Television revenues increased primarily due to higher international licensing revenues and higher initial telecast revenues. The increase in videogames was mainly due to Warner Bros.’ LEGO and ‘Mortal Kombat’ franchises.
Adjusted operating income increased by 29% ($96 million) to $426 million, as lower revenues were more than offset by a decline in print and advertising costs, primarily due to fewer theatrical releases, and lower theatrical and videogames valuation adjustments, as well as overhead cost savings.
Operating income increased by 31% ($100 million) to $424 million.
From its opening through 2 May, ‘Batman v Superman: Dawn of Justice’ grossed over $860 million worldwide at the box office. For the 2015-2016 television season to date among adults 18-49: ‘Blindspot’ ranked as the #1 new series, The Voiceranked as the #1 non-scripted series and ‘The Big Bang Theory’ ranked as the number one comedy and number two series overall in primetime on broadcast television. In February, Warner Bros.’ ‘Mad Max: Fury Road’ received six Academy Awards, the most of any film released in 2015.