Time Warner profit dips, but ad sales surge

NEW YORK Wed May 4, 2011 6:15pm IST

An issue of People magazine is seen on a newsstand in New York August 4, 2010. Time Warner Inc posted better-than-expected quarterly results on Wednesday, with  revenue rising 6 percent alongside a surge in advertising sales at its cable TV networks. REUTERS/Shannon Stapleton/Files

An issue of People magazine is seen on a newsstand in New York August 4, 2010. Time Warner Inc posted better-than-expected quarterly results on Wednesday, with revenue rising 6 percent alongside a surge in advertising sales at its cable TV networks.

Credit: Reuters/Shannon Stapleton/Files

Related Topics

NEW YORK (Reuters) - Time Warner Inc posted better-than-expected quarterly results on Wednesday, with revenue rising 6 percent alongside a surge in advertising sales at its cable TV networks.

Time Warner, which owns cable networks such as CNN and TBS, as well as magazines and a movie studio, is the latest media company to benefit from the strength of the advertising market. CBS Corp, Viacom Inc and Discovery Communications have all reported exceptionally strong results this quarter.

"I love the advertising numbers," said Laura Martin, an analyst with Needham Capital. "It was an excellent number -- really, they did a good job."

For the first quarter, Time Warner reported net income of $651 million, or 59 cents per diluted common share. This compares to net income in the prior year quarter of $725 million, or 62 cents per diluted common share.

First-quarter adjusted earnings of 58 cents a share came in 2 cents above analyst consensus expectations.

The decline in profit was largely due to higher programming costs, specifically those related to its deal with CBS to share coverage of the NCAA basketball tournament, which carries costly rights fees.

But the flip side to the deal is it helped drive a big jump in advertising sales at its cable networks at a time when corporations appears willing to spend more on national campaigns, particularly when it comes to so-called event programming.

Overall revenue rose 6 percent to $6.7 billion, the media company said on Wednesday. Analysts had expected the New York company to post revenue of $6.44 billion, according to Thomson Reuters I/B/E/S.

Stronger TV ad sales were the major contributor to revenue growth. At its cable networks, ad sales rose by 48 percent.

In its movie division, revenue dropped 3 percent to $2.6 billion, partly due to several big hits that came out during the quarter a year ago, including "Sherlock Holmes" and "The Blind Side."

In publishing, home to Time, Fortune and Sports Illustrated, revenue was basically steady at $798 million.

The company also repeated earlier forecasts that its 2011 earnings would be up from those in 2010 by "the low teens" in percentage growth.

Shares of Time Warner are up 17 percent this year, far outpacing the broader S&P500.

(Additional reporting by Jennifer Saba; Editing by Derek Caney)

FILED UNDER:

Sony Cyber Attack

REUTERS SHOWCASE

Ten Years On

Ten Years On

10 years on, tsunami warning stumbles at the "last mile".  Full Article 

Exit Polls

Exit Polls

BJP unlikely to form Jammu & Kashmir govt - polls.  Full Article 

Forceful Conversions

Forceful Conversions

BJP distances itself from religious conversions.  Full Article 

Hopeful Dhoni

Hopeful Dhoni

India's new vintage nearly ready, says Dhoni.  Full Article 

Photo

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Ali Hospitalized

Ali Hospitalized

Boxing great Muhammad Ali hospitalized with pneumonia.  Full Article 

Going International

Going International

Bollywood’s Priyanka Chopra sets sights on American TV.  Full Article 

India This Week

India This Week

Some of our best photos from this week.   Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device   Full Coverage