Time Warner Inc (NYSE:TWX) reported first quarter earnings on Wednesday, which far surpassed estimates thanks to the strong revenue from HBO cable and Turner Broadcasting unit, showing that there’s still chance to squeeze revenue out of cable distributors.
Time Warner’s net income rose from $970 million to $1.21 billion this year, reached $1.51 per share, higher than expected profit of $1.30 per share.
Total revenue rose by 3%, from $7.13 billion to $7.31 billion. HBO cable channel, which is the home to many popular shows, contributed 7.7 percent increase in revenue in first quarter. Turner Broadcasting unit, including cable networks TBS, TNT and CNN, rose 7.2 percent to $2.91 billion in revenue. Advertising revenue contributed 5 percent increase, and 11 percent rise was from fees paid by distributors like AT&T Inc. and Comcast Corp. Turner also benefited from telecasting the final game of NCAA Men's Basketball Championship, which brought strong revenue to TBS.In addition, CNN also has strong financial performance owing to the coverage of the presidential election and its original series.
Sales at Warner Bros. studio declined 2.8 percent to $3.1 billion.The strong performance in HBO and Turner compensated for the decrease.
“In recent years, as you all know, we have been investing aggressively in the very best content, while moving quickly to take advantage of new distribution opportunities that are emerging around the world,” said Time Warner Chief Executive Jeff Bewkes, “That’s exactly what you are seeing in our first-quarter results.” He also mentioned that the company would maintain cost controls at the same time.
Time Warner executives also forecasted advertising revenue growth for the second quarter at a mid-to-high single-digit percentage rate on a conference calls on Wednesday.