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$TWX 1Q15 10-Q: For 1Q15, costs of revenues increased to $4.088Bil from $3.851Bil in 1Q14, reflecting increases at the Warner Bros. and Home Box Office segments, partially offset by a decrease at the Turner segment. SG&A expenses decreased 6% to $1.189Bil from $1.270Bil for 1Q14, primarily reflecting decreases at the Turner segment and Corporate.
In 3Q17, $TWX’s Warner Bros.witnessed 5% increase in revenue to $4.1Bil, due to higher games revenues. Games revenues benefited from a favorable mix of releases in the current year period. Theatrical revenues decreased as lower home entertainment revenues were partly offset by higher television licensing revenues of theatrical product.
$TWX reported a 13% rise in Home Box Office revenue to $1.7Bil, due to increase of 16% in Subscription revenues, partially offset by a decrease of 7% in Content and other revenues. Subscription revenues increased due to higher domestic subscribers and rates and international growth.
During 4Q17, revenues in $TWX’s Turner segment rose 10% to $3.1Bil, helped by increases of 14% in Subscription revenues, 32% jump in Content and other revenues and 2% rise in Advertising revenues. Subscription revenues benefited from higher domestic rates and growth at Turner's international networks.
Media giant $TWX reported an increase in its 4Q17 profits, mainly due to gains at Turner and HBO and also a benefit of $1.06 a share from tax cuts. Net income rose to $1.3Bil, or $1.75 per share, compared to $29MM, or $0.37 per share a year ago. Adj. EPS was $2.66 Revenues grew 9% to $8.6Bil.
$T will increase 2018 capital investments by $1Bil with tax reform. Even with that, $T expects significant free cash flow growth in 2018 and going forward with dividend payout ratio improving into high 50% range this year. And $T is committed to deleveraging after $TWX closes with plans to return to historic levels by end of 2020, if not before.
$DISH CEO Charlie Ergen said $T's proposed acquisition of $TWX may not yet be dead. The $85.4Bil deal was being scrutinized by the US Department of Justice, which has sought significant asset sales to approve it. “By no means is it dead and I think there certainly may be ways they can work it out,” Ergen said.
$TWX expects operating income at Warner Bros. to decline in 4Q17 compared to 4Q16 due to the number and mix of theatrical home entertainment releases, including the comparison to the release of Suicide Squad in 4Q16, as well as higher costs related to the mix of theatrical releases and television series production.
$TWX expects Turner’s subscription revenue growth in 4Q17 to increase at a similar rate as in 3Q17. The company anticipates Turner’s total advertising revenues will increase in the low single-digits in 4Q17 compared to 4Q16. $TWX anticipates Home Box Office’s subscription revenue growth rate will increase in 4Q17 relative to 3Q17.
$TWX reaffirmed its full-year 2017 business outlook. The company continues to expect its 2017 full-year adjusted operating income to increase in the high single-digits, based on current foreign exchange rates. The outlook does not include the costs associated with the pending acquisition by AT&T Inc. which is expected to close before 2017-end.
$TWX's revenues from Warner Bros. rose 2% to $3.5Bil in 3Q17 compared to 3Q16, reflecting higher theatrical and videogames revenues partially offset by lower television revenues. Theatrical revenues increased due to higher home entertainment and television licensing revenues of theatrical product.
In 3Q17, $TWX’s HBO revenues grew 13% to $1.6Bil vs. 3Q16, due to increases of 12% in Subscription revenues and 14% in Content and other revenues. Subscription revenues rose due to higher domestic subscribers and rates and international growth. Content & other grew primarily due to higher international licensing and home entertainment revenues.
During 3Q17, revenues in $TWX’s Turner segment increased 6% to $2.8Bil vs. 3Q16, due to increases of 13% in Subscription revenues and 4% in Content and other revenues, partially offset by a decline of 3% in Advertising revenues. Subscription revenues benefited from higher domestic rates and growth at Turner’s international networks.
While awaiting the DOJ approval for $TWX acquisition, $T reported drop in 3Q17 earnings due to higher interest expenses as well as hurricane and earthquake impact costs. Net income fell to $3.03Bil or $0.49 per share from $3.33Bil or $0.54 per share in 3Q16. Revenue slid 3% to $39.7Bil on declines in legacy wireline services and consumer mobility.
$T received approval from Brazil’s antitrust authority, the Conselho Administrativo de Defesa Economica (CADE) for its pending acquisition of $TWX. Despite getting all required approvals outside the U.S., the merger transaction remains under review by the U.S. Department of Justice. $T expects the transaction to close by the end of 2017.