Strong international revenues at Turner helped boost Time Warner’s second quarter results, along with the success of Warner Bros movie Wonder Woman, but operating income dipped by 8% due to declines at both Turner and the Warner Bros film unit, offset by improved operating income from HBO.
Turner revenues grew by 3% to US$3.1 billion (€2.6 billion), due to a 13% increase in subscription revenue offset by advertising and content revenue declines. However, Turner’s operating income fell by 7% to US$1.1 billion thanks to higher programming costs, up 12%, mostly due to the group’s new agreement with the US National Basketball Association.
HBO revenues increased more modestly by 1% to US$1.5 billion, with an 8% increase in subscription revenue offset by declines in content and other revenues. Operating income grew by 10% to US$531 million thanks to lower expenses.
The Warner Bros film studio was the star of the quarter in terms of revenue, rising by 12% to US$3 billion on the back of the success of Wonder Woman. However, costs at the studio rose significantly, taking operating income down 28% to US$223 million. Operating income for the prior year also included a one-time gain from the sale of Flixter.
Overall, Time Warner posted revenues of US$7.3 billion, up 5%, and operating income of US$1.7 billion.
“We’re very pleased with our first-half results, which keep us on track to achieve our objectives for the year. Our performance is a result of the continued successful execution of our strategic objectives – with the strong subscription revenue growth at Home Box Office and Turner a great example of this – along with the investments we’re making in our brands and high-quality video content,” said chairman and CEO Jeff Bewkes.
Bewkes said that Time Warner’s planned merger with AT&T “remains on track to close before year end, pending regulatory review and consents”.
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17th September 2019