The company which owns the TNT, CNN and HBO cable channels, reported second-quarter profit that topped analysts’ estimates. Time Warner reported a 25% earnings jump thanks to strong performance from its movie unit and ad sales tied to sports programming.
Excluding some items, earnings were 83 cents a share in the period, surpassing the 76 cents that analysts predicted on average, according to data compiled by Bloomberg. Network advertising sales rose 11%, helped by the National Basketball Association playoffs on TNT and the college basketball tournament, the New York-based company said.
The entertainment giant also increased its full-year forecast, saying adjusted earnings would see percentage gains in the “mid-teens” from a base of $3.24 a share.
Chief Executive Officer Jeffrey Bewkes has focused Time Warner’s growth strategy on its TV business, which accounts for more than 70% of operating income. He announced plans in March to spin off magazine publisher Time Inc., the company’s worst-performing division, after unsuccessful talks to merge the unit with Meredith Corp.
“Our networks businesses, Turner and HBO, continued to shine, reflecting the success of our increased investments in distinctive programming that is resonating with audiences, advertisers and affiliates,” Bewkes said in a statement cited by Bloomberg. “TNT and TBS finished the second quarter as the No. 1 and No. 3 ad-supported cable networks in prime time for adults 18 to 49.”
The company was pushed ahead by the fact that big summer releases “Man of Steel,” “Hangover III” and “The Great Gatsby” all turned out to be hits. Revenue at Time Warners film and television studio rose 12% on what has been a generally flat quarter at U.S. movie theaters, according to ticket sale tracker Box Office Mojo.
Time Warner also posted favorable growth from its cable TV networks. Revenue rose 7%, helped by strong ad sales for the NBA playoffs on TNT and the 2013 NCAA basketball tournament. Meanwhile, revenue fell 3% at the Time Inc. unit, which the company is in the process of spinning off as a separate company. Earnings did increase for the nations largest magazine publisher, however.
Shares of Time Warner rose more than 3% in pre-market trading. Media stocks have been particularly strong performers this year. Time Warners shares are up 34% so far in 2013. Disney, Viacom CBS and Twenty-First Century Fox, the recent spin-off of Rupert Murdochs News Corp., have all done even better.
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