Ad revenue, home entertainment lift results
Media giant Time Warner continued a stream of upbeat showbiz earnings, posting a 10% jump in net profit off its biggest quarterly revenue gain in nearly two years.
Time Warner CEO Jeff Bewkes told investors during a conference call Wednesday that CNN is talking with broadcast networks, including CBS, to form a news alliance. “We have long been in discussions with, really, all of the candidates,” said Bewkes, who also indicated a purchase of MGM is possible if the price is right.
Income rose to $725 million in the third quarter ended in March from $660 million the year before. Revenue grew 5% to $6.3 billion. An advertising recovery benefited both Turner and Time Inc. and the continued popularity of “The Blind Side” and “Sherlock Holmes” buoyed Warner Home Video, the company said Wednesday.
Turner Broadcasting and HBO saw revenue rise 9% to $3 billion.
Operating income for the networks segment jumped 28% to $1.2 billion. The gains came as subscription revenues rose $131 million, or 7%; ad revenue grew 9%, or $67 million; and content revenue was up 22% by $46 million.
The growth in subscription sales resulted primarily from higher rates at Turner and HBO, international growth and expansion, including the consolidation of HBO Central Europe.
Ad revenue benefited primarily from growth at Turner’s domestic entertainment networks, related mainly to strong scatter pricing — partly offset by a decrease at the news networks.
Content got a boost from higher ancillary sales of HBO original programming, including the domestic basic cable television sale of “Entourage” and higher licensing revenues at Turner.
TNT and TBS networks both ranked among the top three ad-supported cable nets in primetime for adults 18-49 and 25-54 for the quarter.
In April, Turner joined with CBS in a 14-year pact for the exclusive U.S. TV, Internet and wireless rights to the NCAA’s Division I men’s basketball tournament beginning in 2011.
Last month, Turner signed Conan O’Brien to host a late-night talk show on TBS.
At Warner Bros., revenue rose 2% to $2.7 billion reflecting more and better-performing home videos than the year-earlier quarter, partly offset by lower TV licensing fees due to the timing and mix of network deliveries versus to the first quarter of 2009.
Operating income at the studio surged 43% to $307 million, helped in part by lower restructuring costs year-on-year.
Warner Bros. Home Entertainment reached agreements with Netflix and Redbox to make Warner Bros. new DVD and Blu-ray Disc titles available to their customers after a 28-day window.
Publisher Time Inc., battered in recent years by a sharp downturn in print advertising, swung to the black, posting a $50 million profit from a $32 million loss the year before on cost savings and lower marketing and pension expenses.
Revenue dipped 1% to $799 million.
Advertising revenue rose 5%, by $18 million and overall subscription revenue edged up 2% by $5 million. The company said higher domestic print magazine and online ad revenues were offset by the impact of the sale of Southern Living At Home in the third quarter of 2009.
Time Warner noted that in January its board of directors increased the amount remaining on the company’s common stock repurchase program to $3 billion. From January 1 through April 30, 2010, the company repurchased approximately 22 million shares of common stock for approximately $666 million.