With its television businesses humming and its movie studio taking a back seat, Time Warner turned in solid first quarter financials.
Overall, Time Warner adjusted earnings rose 11 percent to a record $2 billion. While revenue slipped in the company’s Warner Bros. unit, profit there jumped because fewer theatrical releases meant less promotional spending to advertise them. Revenue and profit climbed at both its HBO and Turner television divisions.
Warner Bros. sales slipped about 3 percent because it released fewer movies, although licensing films to TV companies overseas cushioned the drop. The latest period included the release of “Batman v Superman: Dawn of Justice” late in the quarter, while the year-earlier period included “American Sniper” and “The Hobbit: The Battle of the Five Armies.”
Despite Warner Bros.’ sales decline, the studio’s adjusted profit jumped 29 percent, because fewer releases meant less print and advertising costs, as well as other cost savings.
CEO Jeff Bewkes said that “Batman v Superman” set the stage for what the company’s expects will be “a big year in film.” He called out the coming releases of comic-book action flick “Suicide Squad” and “Harry Potter” offshoot “Fantastic Beasts and Where to Find Them.”
In Time Warner’s Turner television business, which includes TBS and CNN, revenue climbed 7 percent and adjusted profit was up 10 percent, led by strength in cable subscriptions because of higher rates, even though its number of U.S. subscribers slid.
And at HBO, revenue’s 8 percent climb was driven by surging international demand to license the premium network’s content. HBO enjoyed more U.S. subscribers paying higher rates, too. The company said it is spending more on programming and on marketing for its HBO Now stand-alone streaming service.
Overall in the latest period, Time Warner reported a profit of $1.214 billion, or $1.51 a share, compared with $970 million, or $1.15 a share, a year earlier. Adjusted profit jumped to $1.49, well above the $1.30 average estimate from a survey of analysts.
Revenue rose 2.5 percent to $7.308 billion. Analysts were expecting $7.299 billion.
The company reiterated its previous guidance for the full year.
Shares were up 1.5 percent at $74.75 in premarket trading at 7:30 a.m. ET.