Warner Bros. studio revenue rose 8 percent, but offset by “Inception” marketing costs
Time Warner posted a 7 percent bump in profit during the second quarter, as advertising revenue rose and the company’s film studio and television divisions delivered strong performances.
The news comes on the heels of a glowing quarterly earnings report by CBS Corp. and ahead of expected positive reports from News Corp., Viacom and Disney — a sign that the industry’s post-recession turnaround is beginning to accelerate.
Time Warner also upped its revenue forecast for the rest of the year.
"Our investments in high-quality content across the company continue to pay off,” Time Warner chief Jeff Bewkes said. “Turner’s original programming strategy contributed to the quarter’s strong advertising growth and helped to generate pricing gains at the high end of the recent 2010-2011 Upfront.”
Net income rose to $562 million, or 49 cents per share, up 7.2 percent from $524 million a year ago. Adjusted operating income rose double digits (15 percent) to $1.2 billion, or 50 cents per share.
Overall revenue climbed 8 percent to $6.38 billion. It was the biggest increase in two years, Bewkes said. Overall advertising increased 11 percent during the quarter.
Revenue increased 11 percent at Time Warner’s television networks, as cable subscriptions rose 9 percent and the segment’s advertising jumped 14 percent.
Revenue at Warner Bros. rose 8 percent on the box office strength of "Clash of the Titans" and "Sex and the City 2” – though the gain in revenue was offset by higher production and advertising costs, as operating profit fell about 2 percent.
Revenue at the company’s Time Inc. publishing arm was virtually flat, though advertising for its magazines increased 4 percent during the quarter. Nonetheless, deep cost-cutting helped operating profit rise 50 percent.
Bewkes said Time Warner expects earnings per share will end the year up at least 20 percent – an increase from the mid-teens forecast it delivered in May.