Subscription revenues and Wonder Woman raise Time Warner

Wonder Woman

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”.