Time Warner Bests Earnings Projections; Jeff Bewkes Credits HBO, Turner and Comic Book Adaptations

Company hits revenue forecasts right on the head

Last Updated: November 5, 2014 @ 11:50 AM

Time Warner nailed Wall Street’s revenue forecast and bested its projected earnings per share for its 2014 third quarter.

Analysts estimated that Time Warner would report earnings per share of $0.94 for 2014’s third quarter on $6.2 billion in revenue. In terms of the latter, that $6.2 billion was exactly what the company reported on Wednesday, which represented a three percent uptick from 2013’s third quarter.

Meanwhile, Time Warner’s reported EPS exceeded estimates. Adjusted EPS — which included a $639 million tax benefit — was $1.22, way up from $0.91 for the year-ago quarter. Excluding the tax benefit, adjusted EPS would have been $0.97, still besting forecasts.

Also read: Kevin Reilly Officially Named TBS, TNT President and Chief Creative Officer for Turner Entertainment

For Turner, revenue grew five percent thanks to an increase in subscriptions. However, internationally, the broadcasting segment saw slight advertising declines, partially offsetting.

Also, operating income declined due to the costs of the recent Turner restructuring, including severance costs. That came to the tune of a $199 million hit, compared to just $30 million last year.

On Tuesday, a day before Time Warner reported its Q3 numbers, the company’s Turner Broadcasting arm named Kevin Reilly the new TNT, TBS president. He is also chief creative officer across Turner Entertainment.

Also read: Turner CEO John Martin on Layoffs: ‘That’s Going to Yield Significant Savings’

HBO revenue grew 10 percent in the quarter, with that also being credited to subscription increases. That branch doubled its year ago restructuring and severance costs to $48 million, a smaller portion.

The Warner Bros. wing saw a three percent revenue increase, mostly due to TV projects and SVOD rises. Those increases were partially offset by a weaker summer box office when compared to last year.

Also read: Discovery Falls Shy of Q3 Earnings Estimates, U.S. Nets Don’t Move Needle

Time Warner has repurchased 69 million shares for $4.9 billion year-to-date through Oct. 31. Since the second quarter’s Aug. 6 release, 17 million shares of common stock for $1.3 billion were bought back.

In June 2014, the company’s board authorized an additional $5 billion of share repurchases. As of Oct. 31, $5.1 billion remained available for repurchases.

Also read: Dish Network’s Profit, Earnings Drop Along With Subscribers

“We had another good quarter, featuring solid revenue growth as well as strong growth in Adjusted EPS,” Chairman and Chief Executive Officer Jeff Bewkes said in the earnings release. “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. And once again, we are seeing the benefits of our increased investments in great content and storytelling.”

Also read: CNN, Cartoon Network Among Turner Networks Dropped by Dish During Carriage Dispute

He also touched on Turner’s valuable sports programming: “Turner’s extension last month of its longstanding relationship with the NBA through the 2024-25 season is another great example of investing in distinctive programming that will serve us well for years to come.”

Also read: Time Inc. Exceeds Earnings Expectations on Strong Digital Ad Growth

Bewkes closed his printed sentiments by boasting about his DC Comics slate for both TV and film. 

“Season-to-date, ‘Gotham’ ranked as broadcast’s No. 2 new show among adults 18-49, while ‘The Flash’ had the most-watched telecast ever on The CW,” the executive bragged. “These shows are among five series featuring DC characters that will air this season. DC is also a key component of the ambitious film slate that Warner Bros. recently unveiled.”