Robust advertising sales boost bottom line
Healthy advertising sales, even at its struggling magazine division, helped boost revenues at Time Warner in the third quarter, execs said Wednesday.For the quarter ending Sept. 30, Time Warner posted a 2% jump in revenues to $6.4 billion, with advertising revenues up by 9%. Net profits fell 21% to $522 million, but that included a one-time $295 million loss from debt redemptions. Ad revenues at its TV networks rose 10% and 5% at publishing arm Time Inc. Time Warner revised its outlook for the year, saying that adjusted earnings per share will be up in the high 20 percentage range. “This is shaping up to be another good year,” said chairman-CEO Jeff Bewkes, who also announced a new premium VOD service for movies. Revenues at Turner Broadcasting and HBO were up 9% in the quarter, on the strength of shows including TNT’s “The Closer” and “Rizzoli and Isles,” and on DVD sales of HBO’s “True Blood” and “The Pacific.” Adjusted operating profits rose 17% to $1.1 billion and would have been even higher had it not been for higher programming costs. They rose 5% due to the budgets for more original TV shows, a major push at Turner Broadcasting. Pricing in the scatter ad market rose 10%-20% above the 2010/11 upfront market, Bewkes said. Film revenues were flat at $2.8 billion but that was better than expected given the tough comparisons to last year when “Harry Potter and the Half-Blood Prince” and “The Hangover” boosted revenues. The blockbuster “Inception,” which has earned $800 million worldwide, helped lift Warner Bros. in the quarter. Bewkes said Warner Home Video ranked No. 1 in homevideo sales in the U.S. for the first nine months of the year with more than a 20% share of the market. He also pointed out that Warner Bros. TV had the No. 1 new comedy series in the 18-49 demo with CBS’ “Mike and Molly.” At Time Inc., advertising revenues were up 5%, but that was offset by subscription revenue declines of 5% and a decrease of other revenues of 12%. Operating profits rose 45% to $141 million, partly due to cost savings such as lower pension expenses. Time Warner has repurchased 54 million shares for $1.7 billion this year and paid $500 million in dividends. Following the ayem earnings announcement, Time Warner shares fell 34¢ to $32.07 at the close of trading Wednesday.