CNN and HBO parent Time Warner (NYSE: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.
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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.