Time Warner's Q1 income up 25% on CNN, HBO gains
Game of Thrones and Donald Trump have been good to Time Warner this year.
The media giant, which owns CNN, TNT, HBO and Warner Bros., said Wednesday its first-quarter net income rose 25% as higher advertising sales at its news operation and heightened demand for HBO programming offset a decline in the film business.
Net income totaled $1.21 billion vs. $970 million a year ago. Per-share earnings, after adjusting for some items, were $1.49, beating the $1.29 estimated by analysts who were polled by S&P Global Market Intelligence.
“We’re off to a terrific start to 2016, as we benefit from the investments we’ve been making in great content and new capabilities in order to take advantage of the growing demand for high-quality video content around the world," CEO Jeff Bewkes said in a statement.
Revenue increased 3% to $7.3 billion.
Time Warner also reaffirmed its business outlook for the year, saying it still expects 2016 adjusted earnings per share to be in "the range of $5.30 to $5.40."
Turner, Time Warner's unit that operates CNN, TNT, TBS and other TV and digital businesses, reported a revenue gain of 7% to $2.9 billion. Subscription revenues, generated by fees from pay-TV providers based on ratings, rose 11% as its TV networks charged higher rates, but the gain was "partially offset by the impact of foreign exchange rates and lower domestic subscribers," the company said.
Advertising sales jumped 5% due to the robust performance of CNN, which has heavily loaded its programming schedule with presidential election coverage. CNN grew its prime-time ratings by 137% and 159% among adults 25-54 and total viewers, respectively. TBS was the top-rated ad-supported cable network in prime time among adults 18-49, it said.
Programming costs grew 4% as Turner's networks paid more for sports programming.
Revenue at HBO, the company's premium cable network, increased 8% to $1.5 billion as higher domestic rates and subscribers fueled growth in subscription and content revenues. Programming costs increased 11%. "The sixth season premiere of Game of Thrones grew its opening night viewership double digits compared to
a year ago," it said.
Warner Bros.' revenue fell 3% to $3.1 billion as box office sales of its film titles trailed the year-ago quarter's performance. Late in the first quarter, Warner Bros. released Batman v Superman: Dawn of Justice, which cost more than $400 million to produce but opened to disappointing reviews and box office sales. The studio's prior-year quarter included revenues from American Sniper and The Hobbit: The Battle of the Five Armies.