Time Warner reported lower fourth quarter earnings as the company grew its revenues but incurred expenses paying off debt as it prepared to be acquired by AT&T.
Net income for the fourth quarter was $293 million, or 37 cents a share, compared with $857 million, or $1.06 a share, a year ago.
The company said the decline in earnings per share reflects premiums paid and costs incurred with repurchasing debt. Adjusted EPS was $1.25 for the quarter, up from $1.06. Operating income rose 22% to $1.69 billion.
Revenues rose 11% to $7.9 billion in the quarter.
The earnings and revenue figures exceeded Wall Street forecasts.
“We had another very successful year in 2016, demonstrating once more Time Warner’s ability to deliver strong financial performance alongside creative and programming excellence,” said CEO Jeff Bewkes. “All our operating divisions increased revenue and profits while also making investments to capitalize on the growing demand for the very best video content and new ways to deliver it to audiences around the world.”
“The deal to be acquired by AT&T Inc., which we announced in October 2016, will accelerate our efforts to spur innovation in the media industry and further strengthen our businesses. We remain on track to close the transaction later this year,” Bewkes said.
At Turner, operating income rose 8% to $841 million. Revenues rose 7% to $2.8 billion. Subscription revenues were up 14%, while advertising revenues were down 2%. Domestic advertising was flat, with growth at CNN offset by lower ratings at its entertainment networks and less revenue generated by the baseball playoffs.
HBO’s operating income increased 9% to $429 million. Revenues increased 6% to $1.5 billion. Subscription revenue rose 5% and content revenues rose 7%.
Warner Bros.’ operating income rose 57% to $574 million. Revenues were up 17% because of the theatric release of the films Fantastic Beasts and Where to Find Them and The Accountant. Television revenues were also higher.