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Time Warner Q4 Profit Tops Estimates; Revenues Up 9%

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Time Warner Inc. (TWX) reported fourth-quarter adjusted EPS of $2.66 compared to $1.25, prior year. Adjusted EPS in the current year quarter included a tax provision benefit of $1.06 related to the U.S. tax reform legislation enacted at the end of 2017. On average, 23 analysts polled by Thomson Reuters expected the company to report profit per share of $1.43 for the quarter. Analysts' estimates typically exclude special items. Adjusted operating income increased 9% to $1.9 billion due to growth at Turner and Home Box Office and lower corporate expenses, partially offset by decreases at Warner Bros. and a negative swing in intercompany eliminations.

Fourth-quarter income from continuing operations attributable to shareholders was $1.4 billion or $1.75 per common share compared to $317 million, or $0.40 per common share, previous year. The company said the increase in EPS reflects the tax provision benefit related to the U.S. tax reform legislation enacted at the end of 2017 and higher operating income. Operating income increased 13% year-over-year to $1.9 billion.

Fourth-quarter revenues grew 9% to $8.6 billion due to increases at all operating divisions. Analysts expected revenue of $8.42 billion for the quarter. Turner revenues increased 10% to $3.1 billion. Home Box Office revenues rose 13% to $1.7 billion. Warner Bros. revenues were up 5% to $4.1 billion.

Full year 2017 adjusted income per share from continuing operations was $7.47, up 27% from $5.86, prior year. Adjusted EPS in 2017 included a tax provision benefit of $1.07 related to the U.S. tax reform legislation. Adjusted operating income increased 7% to $8.2 billion due to increases at all operating divisions. Full-year revenues increased 7% to $31.3 billion.

For full year 2018, Time Warner expects adjusted operating income to increase in the high single-digits, based on current foreign exchange rates. The company noted that its outlook does not include the costs associated with the pending acquisition by AT&T Inc.

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