Time Warner reported on Wednesday that first quarter profit increased 10 percent as advertising revenue began to tick up and improved home video sales – i.e. “The Blind Side” and “Sherlock Holmes” – helped boost revenues.
Net income was $725 million – or 62 cents per share -- for the quarter, up from $660 million – or 55 cents per share – a year ago.
Revenue was up 5 percent to $6.3 billion – the company’s biggest quarterly revenue gain in nearly two years. Adjusted operating income was up 37 percent to $1.4 billion – the highest in Time Warner history.
"We're seeing demand come back both at our networks and our publishing," chief executive Jeff Bewkes said during a conference call with investors.
At the networks – including Turner Broadcasting and HBO – revenues rose 9 percent, boosted by improved subscriptions, advertising and content sales – including basic cable rights for “Entourage.” Network operating income grew 22 percent. Bewkes noted HBO's "Pacific" averaging 9 million viewers per episode.
Bewkes also lauded recent strategic moves at Turner, including TBS’ signing of Conan O’Brien, and the company’s deal with CBS to carry the NCAA men’s basketball tournament. With O'Brien, Bewkes said, "Turner will essentially own late night television."
At Warner Bros., revenues ticked up 2 percent (to $2.7 billion) on strong video sales of “Sherlock Holmes” and “Blind Side.” Operating income was $307 million, up 43 percent on improved revenues and “lower restructuring costs.” Bewkes also pointed out Warner Bros. struck deals with Netflix and Redbox, making home videos available to those customers after a 28-day window.
Time Inc.’s revenues fell 1 percent, but advertising grew 5 percent (including print and online, where revenues were up 20 percent) and the publishing division swing to a profit of $50 million (compared to a loss of $32 million during the same period last year). It was Time Inc.'s first quarter of ad growth in more than two years.
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