Post Earnings Coverage as Time Warner Reported 11% Increase in Revenue and 18% Rise in Adjusted EPS

Upcoming AWS Coverage on CBS Corp. Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 27, 2017 / Active Wall St. announces its post-earnings coverage on Time Warner Inc. (NYSE: TWX). The Company disclosed its fourth quarter and fiscal 2016 financial results on February 07, 2017. The media and entertainment Company surpassed top- and bottom-line expectations. Register with us now for your free membership at:

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One of Time Warner’s competitors within the Entertainment – Diversified space, CBS Corp. (NYSE: CBS), reported on February 15, 2017, its results for Q4 and full year of 2016. AWS will be initiating a research report on CBS Corp. in the coming days.

Today, AWS is promoting its earnings coverage on TWX; touching on CBS. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended December 31, 2016, Time Warner reported that revenues grew 11% to $7.89 billion compared to $7.08 billion in Q4 2015, due to increases at all operating divisions, and included the unfavorable impact of foreign exchange rates of approximately $110 million in the reported quarter. The Company’s revenue numbers exceeded analysts’ consensus of $7.75 billion.

For Q4 2016, the Company’s operating income increased 22% to $1.69 billion and adjusted operating income increased 25% to $1.8 billion due to growth at all operating divisions and a positive swing in intercompany eliminations.

Time Warner posted Q4 2016 diluted income per Common Share from continuing operations (EPS) of $0.40, down 62% compared to $1.06 for the prior year’s same quarter. On an adjusted basis, the Company posted EPS of $1.25, up 18% versus $1.06 for the prior year’s comparable quarter. Adjusted EPS in the reported quarter excluded $1.0 billion of premiums paid and costs incurred in connection with debt repurchases. Time Warner’s adjusted earnings numbers surpassed market expectations of $1.18 per share in earnings.

Full-Year Results

For FY16, Time Warner‘s revenues increased 4% to $29.32 billion compared to $28.12 billion in FY15. The Company’s operating income increased 10% to $7.5 billion and adjusted operating income increased 10% to $7.6 billion. Time Warner posted EPS of $4.94, up 8% compared to $4.58 in 2015. The Company’s adjusted EPS was $5.86, up 23% from $4.75 for the prior year.

Segment Performance

TURNER –

For Q4 2016, Time Warner’s Turner division revenues increased 7%, or $177 million, to $2.84 billion, driven by 14% growth in Subscription revenues and 9% gain from Content and other revenues, which was partially offset by a decrease of 2% in Advertising revenues. The Company noted that Subscription revenues benefited from higher domestic rates and growth at Turner’s international networks, which was partially offset by the impact of lower domestic subscribers. During Q4 2016, Turner’s operating income increased 8% on a y-o-y basis to $841 million, reflecting revenue growth which was partially offset by higher expenses, including increased marketing costs primarily due to new original series. For FY16, the segment’s revenues increased 7%, or $768 million, to $11.4 billion, benefiting from increases of 12% in Subscription revenues and 3% in Advertising revenues. Operating income increased 7%, or $285 million, to $4.4 billion due to the increase in revenues partially offset by higher expenses, including increased programming, and marketing costs.

HOME BOX OFFICE (HBO) –

For Q4 2016, Time Warner’s HBO division revenues increased 6%, or $79 million, to $1.49 billion, which was attributed to a 5% increase in Subscription revenues and 7% growth in Content and other revenues. Subscription revenues increased due to higher domestic rates and international growth. The increase in Content and other revenues primarily reflects higher home entertainment revenues, which was partially offset by lower international licensing revenues. The segment’s operating income increased 9%, or $36 million, to $429 million, due to the increase in revenues which was partially offset by higher expenses, including increased distribution expenses related to the timing of home video releases. For FY16, HBO’s revenues increased 5%, or $275 million, to $5.9 billion, due to increases of 5% in Subscription revenues and 2% in Content and other revenues. The segment’s operating income increased 2%, or $39 million, to $1.9 billion, reflecting higher revenues which was partially offset by increased expenses, including higher programming and restructuring and severance costs. HBO received 22 Primetime Emmy Awards in 2016, the most of any network for the 15th consecutive year.

WARNER BROS. –

During Q4 2016, Time Warner’s Warner Bros. division reported revenues of $3.9 billion up 17%, or 563 million, driven by higher theatrical revenues, which benefited from the releases of ‘Fantastic Beasts and Where to Find Them’ and The Accountant, and higher television revenues, primarily due to higher licensing revenues and increased production. The segment’s operating income increased 57%, or $208 million, to $574 million in the reported quarter. For FY16, Warner Bros’ revenues were essentially flat at $13.0 billion, reflecting higher theatrical and television revenues which were offset by lower videogames revenues and the impact of foreign exchange rates. The segment’s FY16 operating income increased 22% to $1.7 billion as increased theatrical contributions and a $90 million gain on the April 2016 sale of Flixster, but which was more than offset the impact from lower videogames revenues.

At the global box office, Warner Bros. was the #2 studio in 2016 and grossed nearly $5.0 billion in box office receipts, its second-best worldwide theatrical performance.

Cash Flow & Balance Sheet

During FY16, Time Warner generated a record $4.4 billion in free cash flow and returned close to $3.6 billion to shareholders in share repurchases and dividends over the course of the year. For FY16, the Company’s cash provided by operations from Continuing Operations grew 22% to $4.7 billion.

Stock Repurchase Program

From January 01, 2016 through December 31, 2016, the Company repurchased approximately 31 million shares of common stock for approximately $2.3 billion. On October 23, 2016, the Company discontinued purchases under its share repurchase program as a result of the pending merger with AT&T Inc.

Regular Quarterly Dividend

On February 07, 2017, the Company’s Board of Directors approved a regular quarterly dividend of $0.4025 per share.

Stock Performance

On Friday, February 24, 2017, the stock closed the trading session at $97.28, slightly climbing 0.23% from its previous closing price of $97.06. A total volume of 2.48 million shares have exchanged hands. Time Warner’s stock price advanced 5.82% in the last three months, 22.49% in the past six months, and 48.13% in the previous twelve months. The Company’s shares are trading at a PE ratio of 19.64 and have a dividend yield of 1.66%.

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