Media giant Time Warner Inc (NYSE:TWX) this morning posted much better than expected earnings results and offered an upbeat forecast, as the company remains on track to be acquired by AT&T next year.
The New York City-based company reported Q3 earnings of $1.83 per share, a full $0.46 better than Wall Street’s $1.37 estimate. Revenues rose 9.2% from last year to $7.17 billion, also easily topping projections for $6.99 billion.
TWX said that Turner revenues rose 9% in the latest period, helped mainly by higher subscription revenues. HBO revenue rose 4% to $1.4 billion on higher subscriptions as well. Warner Brothers revenues increased 7% $3.4 billion, helped by rising theatrical revenues but hampered by sluggish video game revenues.
Looking ahead, Time Warner forecast full-year 2016 earnings to range from $5.45 to $5.55 per share, which would beat Wall Street’s consensus $5.42 estimate.
The company commented via press release:
“The agreement we announced on October 22 to be acquired by AT&T Inc. represents a great outcome for our shareholders and an excellent opportunity to drive long-term value well into the future. Combining with AT&T is the natural next step in the evolution of our business and allows us to significantly accelerate our most important strategies.”
TWX expects the acquisition by AT&T to be completed some time next year, assuming it meets regulatory approvals and rival bidders don’t emerge. Earlier this week, a New York Post report surfaced that Goldman Sachs was pushing Apple to purchase the company, but so far there’s been no follow-up on that development.
Time Warner shares rose $1.75 (+1.98%) to $90.00 in premarket trading Wednesday. Prior to today’s report, TWX had gained 36.46% year-to-date, more than ten times the return of the benchmark S&P 500 during the same period.