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Time Warner posts higher Q4'17, full-year results on Turner, HBO growth

Time Warner Inc. on Feb. 1 posted net income attributable to shareholders of $1.39 billion, or $1.75 per share, compared to an income of $293 million, or 37 cents per share, in the year-ago period.

Revenues for the quarter totaled $8.61 billion, up 9% from $7.89 billion in the prior-year period, due to increases at all operating divisions. Adjusted EPS was $2.66 versus $1.25 for the prior-year quarter.

Quarterly EPS and adjusted EPS included a tax provision benefit of $1.06 related to the U.S. tax reform legislation enacted at the end of 2017. Adjusted EPS excludes premiums paid and costs incurred in connection with debt repurchases of $1.1 billion in the current year quarter and $1.0 billion in the prior-year quarter.

The fourth-quarter S&P Capital IQ consensus estimate was $1.43 on a GAAP basis and $1.44 on a normalized basis.

Operating income increased 13% to $1.91 billion, while adjusted operating income increased 9% to $1.91 billion, due to growth at Turner Broadcasting System Inc. and Home Box Office Inc. and lower corporate expenses, partially offset by decreases at Warner Bros. and a negative swing in inter-company eliminations.

Full-year revenues increased 7% to $31.27 billion due to increases at all operating divisions. For 2017, the company reported net income attributable to shareholders of $5.25 billion, or $6.64 per share, as compared to $3.93 billion, or $4.96 per share, in 2016. The 2017 S&P Capital IQ consensus estimate was $6.31 on a GAAP basis and $6.26 on a normalized basis.

For the year ended Dec. 31, 2017, the income tax impact includes a $69 million benefit mainly reflecting the reversal of a valuation allowance related to the use of capital loss carryforwards to offset the gains on the Turner segment's sales of its interest in the joint venture that owns the Omni Atlanta hotel and its Atlanta broadcast television station.

For the three months and year ended Dec. 31, 2017, the company reported $3 million and $279 million, respectively, of costs related to the AT&T Inc. merger.

Looking ahead, Time Warner expects its 2018 full-year adjusted operating income to increase in the high single-digits, based on current foreign exchange rates.