NEW YORK – Tim Warner Inc. said Wednesday that improving results at its cable channels and a couple of popular DVD releases boosted its first-quarter net income by 10 per cent.
The New York media conglomerate’s premium HBO channels took in more from subscription revenue, while its Turner cable networks rode a recovery in ad spending.
The improving ad market and cost cutting also helped Time Warner’s publishing segment reverse its losses. The publishing division includes Time Inc. magazines such as Time and Sports Illustrated.
First quarter results across the media business have brought evidence that companies are more comfortable putting money into marketing their products as the recession fades.
Viacom Inc., whose cable channels include BET, MTV and Comedy Central, reported a 3 per cent uptick in worldwide ad sales in the first quarter. Comcast Corp., which has E! Entertainment Television, Style Network and the Golf Channel, reported a 23.5 per cent jump.
Overall, Time Warner earned $725 million, or 62 cents per share, for the period ended March 31. That’s better than its profit of $660 million, or 55 cents, a year ago.
Removing one-time items, profit was 61 cents per share.
Revenue climbed 5 per cent to $6.32 billion from $6 billion, the biggest increase in almost two years.
“The advertising recovery benefited both Turner and Time Inc., while the continuing popularity of The Blind Side and Sherlock Holmes helped lift Warner Bros.’ home video sales,” Chairman and CEO Jeff Bewkes said in a statement.
The performance surpassed the expectations of analysts polled by Thomson Reuters, who forecast a smaller profit of 48 cents per share on revenue of $6.25 billion. These estimates generally take out one-time items.
Nonetheless, its shares fell 27 cents to $32.40 in morning trading as the broader market fell on European debt worries.
In the network division, which houses HBO and Turner Broadcasting, revenue rose 9 per cent on a 7 per cent increase in subscription revenue, a 9 per cent rise in ad revenue and a 22 per cent increase in content revenue.
The filmed entertainment unit, which contains Warner Brothers, reported a 2 per cent revenue increase mainly on its improved home video sales.
Revenue for the publishing division dipped 1 per cent despite a 5 per cent increase in ad revenue and a 2 per cent rise in subscription revenue.
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