Time Warner (TWX 99.50, +0.17) has added 0.2% in pre-market after beating earnings expectations for the first quarter.
The media company delivered above-consensus earnings of $1.66 per share on a 5.8% year-over-year increase in revenue to $7.74 billion, which was slightly ahead of expectations.
Time Warner's revenue growth rate was driven by increases across all three reporting segments and was partially offset by higher intersegment eliminations.
Turner revenue grew 6.3% year-over-year to $3.09 billion while adjusted operating income for the segment declined 4.2% year-over-year to $1.19 billion due to higher programming costs. Subscription revenue grew 12.0% as higher domestic rates and growth at the company's international networks offset a decline in domestic subscribers. Content and other revenue increased 16.0% due to higher domestic licensing revenues.
Home Box Office revenue increased 4.1% to $1.57 billion, fueling adjusted operating income growth of 22.4% to $595 million. Subscription revenue increased 5.0% while Content and other revenues declined 1.0%. Lower home entertainment revenue was partially offset by higher licensing revenue.
Warner Brothers revenue increased 8.2% to $3.37 billion while segment operating income increased 19.7% to $510 million. Higher television and theatrical revenues were partially offset by lower videogame revenue. Television revenue increased due to higher licensing revenue while theatrical revenue grew due to an increased number and mix of releases.
Intersegment eliminations resulted in a loss of $286 million after a loss of $213 million one year ago. Overall adjusted operating income grew 7.0% to $2.15 billion.
The company noted that its planned merger with AT&T (T 39.02, +0.07) remains on track to complete by the end of the calendar year.