Time Warner reported higher earnings as cost cuts at Turner Broadcasting boosted operating income. Profits were lower at HBO as it spent on marketing and technology launching HBO Now.
Second-quarter net income rose 14% to $971 million, or $1.16 a share, from $850 million, or 95 cents a share, a year ago.
Revenues rose 8% to $7.3 billion.
The results were ahead of Wall Street expectations. The company also reaffirmed its guidance for full-year results.
At Time Warner’s Turner Broadcasting unit, adjusted operating income rose 20% to $1.1 billion as revenues rose and costs—including programming costs—declined. Turner’s revenue rose 3% to $2.8 billion.
Ad revenues were down 1% because of the strong dollar. Domestic ad revenue was up because of growth at its news networks and strong March Madness sales. Those gains offset the absence of NASCAR programming and having fewer NBA playoff games.
Adjusted operating income fell 8% at HBO, which had higher marketing and technology costs because of the launch of the HBO Now streaming product. HBO revenues were up 1% to $1.4 billion.
Warner Bros.' adjusted operating income was up 46% to $344 million. Revenues rose 15% because of higher video game and television licensing revenues.
“We had a very strong second quarter, with Revenues up 8% and Adjusted Operating Income growing 15% to a quarterly record of $1.9 billion. Our results were led by Turner and Warner Bros., and were achieved at a time when we’re investing aggressively to position the company for continued growth, including the successful launch of HBO NOW, our standalone domestic streaming service,” CEO Jeff Bewkes said in a statement.