Time Warner (NYSE:TWX) beat the Street on Wednesday with a stronger-than-expected 7.3% increase in second-quarter profits, leading the media heavyweight to upgrade its earnings guidance.
The parent of Time Inc., CNN and HBO said it earned $562 million, or 49 cents a share, last quarter, compared with a profit of $524 million, or 43 cents a share, in the year-earlier period.
Excluding one-time items, it earned 50 cents a share, topping estimates for 45 cents.
Revenue totaled $6.38 billion, up 7.7% from the year before -- the strongest growth rate in two years. Analysts had been forecasting revenue of just $6.2 billion.
“Time Warner delivered another quarter of strong financial and operating performance,” CEO Jeff Bewkes said in a statement. “Turner’s original programming strategy contributed to the quarter’s strong advertising growth and helped to generate pricing gains at the high end of the recent 2010-2011 upfront. HBO achieved impressive audience growth for its returning shows, and it has more original series in development than at any time in its history.”
Looking ahead, Time Warner said it now expects to grow its 2010 non-GAAP EPS by at least 20% from the prior year’s $1.83. Previously, the company forecasted growth in the mid-teens.
Time Warner’s stock rallied around the results and guidance, jumping 1.98% to $33.00 in the premarkets Wednesday. The stock was up 11% on the year as of Tuesday’s close.
Time Warner’s networks revenue, which includes TBS and TNT, rose 11% to $3.17 billion last quarter, compared with an 8% increase to $2.5 billion in filmed entertainment and flat revenue of $919 million in publishing revenue. Network advertising revenue climbed 14%, while publishing ad revenue grew by 4%.
Time Warner is one of several media giants to report results this week, including CBS (NYSE:CBS) and FOX Business parent News Corp. (NASDAQ:NWSA).
Recently spun-off AOL (NYSE:AOL) also reported a quarterly loss on Wednesday.