No hit pix, but cable pumps TW

Conglom's revs grew 3% to $10.5 bil

NEW YORK — Time Warner kept an even keel in the last quarter on the strength of its ratings-energized cable networks and humming cable pipes, helping to soothe difficult year-to-year comparisons on the film side, given 2004’s strong perf by the “Harry Potter” and “Lord of the Rings” franchises.Overall, Time Warner’s net income — i.e., profit — of $963 million for the quarter compared with $961 million a year ago. Conglom’s revenue grew 3% to $10.5 billion. Without one-time items, such as the sale in the first quarter of 2004 of Warner Music Group, profits would have been up nearly 25%.

“This is a very exciting time for our company, and we are off to a great start this year,” said chief exec Richard Parsons, noting Time Warner Cable’s winning bid with Comcast to snap up bankrupt cabler Adelphia.

Ted Turner would be proud — TNT, TBS and Cartoon Network nabbed first mention for strong advertising and subscription growth as Parsons reported earnings during an early-morning conference call.

Next up was AOL, which Parsons said posted its highest profit in three years thanks to an uptick in advertising revenue, even while it continued to bleed customers and see a dip in overall revs.

Filmed entertainment — Warner Bros. Entertainment and New Line Cinema — was able to hold its own on the strength of DVD sales of Warner Bros.’ “Harry Potter and the Prisoner of Azkaban” and “Troy” as well as international TV revenues, Parsons said.

Any growth, though, was offset by the tough comparison to the first quarter of 2004, which saw syndie revenues for the third cycle of “Seinfeld” and box office receipts for WB’s “The Last Samurai” and New Line’s “The Lord of the Rings: The Return of the King.” There was also a decline last quarter in consumer product sales.

Filmed entertainment revenues rose just 1% to $3 billion, while adjusted operating income was essentially flat at $410 million.

“Frankly, it was a little better than we thought they’d be,” Parsons said.

Weak first-quarter slate

Also, the first quarter saw lackluster releases “Son of the Mask” and “Upside of Anger” from New Line and “Racing Stripes” from Warner Bros.

Parsons touted WB’s tentpole slate for the rest of the year, including “Batman Begins,” “Charlie and the Chocolate Factory” and “Harry Potter and the Goblet of Fire.”

However, he warned investors that year-to-year comparisons will continue to make things tough for the current quarter.

Wall Streeters were generally sweet on Time Warner earnings and particularly applauded the strength of TW Cable and the pending Adelphia deal.

TW Cable revenues climbed 10% to $2.2 billion in the first quarter, more than any other division. Subscription revs were up 10%; ad revenues, 9%. Adjusted operating income grew 10% to $822 million.

Cable operator did particularly well with regard to revenues from high-speed Internet (up 19%) and revs from enhanced digital video services (up 21%). It also said it did “awesome” in signing 152,000 new phone customers, bringing the total to 372,000.

Time Warner’s television properties — Turner Broadcasting, HBO and the WB Network — saw revenues rise 4% to $2.3 billion on subscriptions and ads. Adjusted operating income rose 6% to $787 million.

TNT, TBS dynamite

Turner Broadcasting, which includes TNT, TBS and Cartoon Network, saw ad revs climb 12%, offset by a 5% dip at ratings-plagued weblet the WB.

Among ad-supported cable nets, TNT finished the quarter No. 1 in the adult 18-49 demo, while TBS came in second. TBS delivered victory in the adults 18-34 demo, boosted by its comedy lineup of “Sex and the City,” “Everybody Loves Raymond,” “Seinfeld” and “Friends.”

Parsons said Cartoon Net’s animated Adult Swim latenight programming block made a successful bow as a separately rated net in April.

TW’s publishing empire, which includes Time Inc. and Time Warner Book Group, also posted revenue gains. Revs rose 8% to $1.2 billion, while adjusted operating income rose 3% to $167 million.

Parsons said mag ad revenues were up 10%, led by People, InStyle and Real Simple and offsetting dips at men’s mags including Sports Illustrated. Warner Books saw a 17% jump in revenues.

Analysts on the earnings conference call saved nearly all their questions for AOL, which saw revenues decline 3% to $2.1 billion.

Uploading ad revs

Internet service lost 549,000 customers, but the associated revenue decline was offset by a 45% jump in ad revenues. As a result of the ad revs, adjusted operating income actually jumped 10% to $540 million, boosted also by a reduction in marketing and network expenses.

Parsons said AOL was a significant contributor to TW’s overall financial health for the quarter, and reminded analysts that several major AOL initiatives will bow this year, including a free AOL portal.

Time Warner shares closed up 3.6% at $17.28 Tuesday.

(Willa Paskin contributed to this report.)

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