Time Warner Q3 Profit Increases; Reaffirms 2015 Adj. EPS View

(RTTNews) - Time Warner Inc. (TWX) reported that its net income for its third quarter ended September 30, 2015 increased 7% from last year. Revenues for the quarter increased 5% to $6.6 billion due to growth at Warner Bros. and Home Box Office, partially offset by higher intercompany eliminations and a decline at Turner. It reaffirmed its 2015 adjusted income per common share from continuing operations outlook.

The company continues to expect its 2015 full-year Adjusted income per common share from continuing operations to be in the range of $4.60 to $4.70. Analysts expect annual earnings of $4.65 per share.

Net income attributable to shareholders for the quarter rose to $1.035 billion from last year's $967 million in the prior year. Income per common share from continuing operations was $1.26 compared to $1.11 in the prior year quarter.

Adjusted income per common share from continuing operations was $1.25 up from $1.22 for the prior year quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $1.09 per share for the quarter. Analysts' estimates typically exclude special items. The increase in Adjusted earnings per share primarily reflected higher adjusted operating income and fewer shares outstanding, offset in part by higher taxes as a result of the $639 million net tax benefit in the third quarter of 2014 mainly related to the reversal of certain tax reserves in connection with an audit settlement.

Excluding a net tax benefit of $639 million, programming charges at Turner and restructuring and severance charges in the prior year quarter, Adjusted earnings per share would have been $0.97 in the prior year quarter.

Adjusted Operating Income grew 85% to $1.8 billion due to growth across all operating divisions, reflecting the absence of programming charges incurred in 2014 at Turner and lower restructuring and severance charges across all segments, partially offset by higher intercompany eliminations. Operating Income increased 89% to $1.8 billion.

Revenues for the quarter increased 5% to $6.6 billion due to growth at Warner Bros. and Home Box Office, partially offset by higher intercompany eliminations and a decline at Turner. Wall Street expected revenues of $6.51 billion for the quarter.

Revenues and Adjusted Operating Income included the unfavorable impact of foreign exchange rates of $290 million and $160 million, respectively, in the quarter.