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Time Warner on Wednesday reported slightly higher third-quarter earnings as most financial metrics showed only small changes from the year-ago period.
The entertainment conglomerate, led by chairman and CEO Jeff Bewkes, posted net income of $838 million, up 2 percent from $822 million in the year-ago quarter.
Looking at earnings per share, the improvement was exaggerated by stock buybacks, which boosted profit 9 percent from 79 cents to 86 cents per share. Adjusted operating profit declined 1 percent to $1.6 billion as growth at the TV networks and publishing units was more than offset by a decline at the film segment.
The results exceeded Wall Street expectations amid continued cost controls.
Time Warner’s revenue of $6.84 billion was down 3 percent from $7.07 billion in the same quarter of 2011 as only the TV networks division posted a gain.
The company on Wednesday also reiterated its full-year 2012 forecast of low double-digit percentage growth in adjusted earnings per share.
Despite the release of The Dark Knight Rises, the conglomerate faced a tough third quarter in its film unit amid difficult year-ago comparisons with the final Harry Potter movie release and other factors that boosted the comparable period in 2011.
“With one quarter left to go in 2012, we’re on track for another very strong year,” Bewkes said. “Our studio faced difficult comparisons in the third quarter, but Warner Bros. Television is having a terrific broadcast season with a successful mix of new and returning shows. For Warner Bros.’ theatrical business, the story this quarter was The Dark Knight Rises, which has brought in over $1 billion at the global box office, surpassing The Dark Knight. And the studio is off to a great start to the fourth quarter with the critical and audience acclaim for Argo, which we’ll follow with the highly-anticipated release next month of the first installment of The Hobbit.”
Overall, the CEO said he was “very confident about how we’re positioned heading into next year and beyond.”
Time Warner said its TV network revenue rose 4 percent in the third quarter to $3.3 billion, benefiting from 7 percent growth subscription revenue thanks to U.S. subscriber growth at HBO and other factors, partially offset by a 1 percent advertising drop. Unfavorable currency exchange rates and the shutdown of networks in Turkey and India also affected results. Adjusted operating profit jumped 12 percent to $1.2 billion due to higher revenue and essentially unchanged programming expenses.
Film revenue decreased 12 percent to $2.9 billion after last year’s bigger number of key releases and the off-network availability of The Big Bang Theory and Friends. “This decline was offset in part by the global theatrical performance of The Dark Knight Rises and an increase in subscription video-on-demand revenue,” Time Warner said. Adjusted operating profit in the film segment declined 38 percent to $330 million as lower print and advertising costs due to fewer theatrical releases partially offset the lower revenue.
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