Time Warner Lifts Full-year Earnings Outlook As Q3 Results Beat View

(RTTNews) - Time Warner Inc. (TWX), which recently agreed to be acquired by AT&T Inc. (T) in an $85.4 billion deal, reported a 41 percent increase in profit for the third quarter from last year, reflecting higher revenues at all three segments. The results were also helped by a tax benefit.

Both revenue and adjusted earnings per share for the quarter beat analysts' estimates. In addition, the company raised its earnings outlook for fiscal 2016.

Third-quarter net income attributable to shareholders rose to $1.47 billion or $1.86 per share from $1.04 billion or $1.26 per share in the prior-year quarter.

The latest quarter's results included a net tax benefit of$0.28 per share related to an Internal Revenue Service or IRS-approved tax accounting method change.

Adjusted income from continuing operations was $1.83 per common share, compared to $1.25 per share in the prior-year period.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.37 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 9 percent to $7.17 billion from $6.56 billion last year. Wall Street expected revenues of $6.98 billion for the quarter.

Turner revenues increased 9 percent to $2.61 billion, due to increases of 12 percent in subscription revenues, 33 percent in content and other revenues, and 2 percent in advertising revenues.

Home Box Office revenues increased 4 percent to $1.43 billion, due to an increase of 5 percent in subscription revenues, partially offset by a decline of 2 percent in content and other revenues.

Warner Bros. revenues rose 7 percent to $3.40 billion, primarily due to higher theatrical revenues, partly offset by lower videogame revenues.

Looking ahead to fiscal 2016, Time Warner now expects adjusted income from continuing operations in a range of $5.73 to $5.83 per share, up from the prior range of $5.35 to $5.45 per share.

The outlook includes the $0.28 per share net tax benefit recognized in the third quarter of 2016 related to an Internal Revenue Service-approved tax accounting method change. Absent that benefit, the outlook for 2016 adjusted earnings would be $5.45 to $5.55 per share. The Street expects earnings of $5.43 per share for the year.