CNN and HBO parent Time Warner (TWX) beat the Street on Wednesday with a 44% leap in third-quarter profits as the media conglomerate generated subscription and advertising revenue growth at its cable arm.
Shares of Time Warner, which is also the parent of Time Inc. and TBS, ticked up about 1% on the stronger-than-expected earnings even as revenue narrowly missed forecasts.
The company said it earned $1.18 billion, or $1.26 a share, last quarter, compared with a profit of $822 million, or 84 cents a share, a year earlier.
Excluding one-time items such as $113 million in asset gains, the company earned $1.01 a share. Analysts had been projected EPS of just 89 cents.
Revenue inched 0.2% higher to $6.86 billion, narrowly trailing the Street’s view of $6.94 billion.
"We had another strong quarter and remain on track for another very successful year, thanks to our commitment to great storytelling across the company,” Time Warner CEO Jeff Bewkes said in a statement.
Time Warner reported a 5% rise in networks revenue to $3.5 billion as subscription revenue increased 4% and ad sales jumped 11%. The company said TBS was the No. 2 ad-supported cable network in prime time in the key demos, while CNN increased total day ratings in the demo by 15%.
Time Warner’s film and TV entertainment arm suffered a 7% drop in revenue to $2.7 billion due to difficult comparisons with the year-earlier period, which included sales from “The Dark Night Rises.”
Publishing revenue slipped 2% to $818 million as subscription revenue slid 4% and ad sales fell 2%. The company, which announced plans to spin off Sports Illustrated parent Time Inc. earlier this year, said the decline in ad sales was mainly due to non-magazines, including website revenue.
New York-based Time Warner gained 1.13% to $69.00 in premarket trading on Wednesday morning, setting them up to extend its 42.6% 2013 rally.