Media and entertainment giant Time Warner Inc. (TWX), Wednesday reported a 24 percent increase in profit for the first quarter, as a slight decline in revenues were offset by strong performance at cable networks division and on improved margins. Earnings for the quarter topped Wall Street estimates, but revenues fell short of expectations.
New York-based Time Warner's profit for the first quarter rose to $720 million or $0.75 per share from $583 million or $0.59 per share last year.
Adjusted earnings improved to $0.82 per share from $0.67 per share. Twenty-eight analysts polled by Thomson Reuters, on average, expected earnings of $0.74 per share for the quarter. Analysts' estimates typically exclude one-time items.
Operating margins for the first quarter improved to 20.3 percent from 17.9 percent last year.
Time Warner's first-quarter revenues dropped to $6.94 billion from $6.98 billion last year. The revenue decrease primarily reflects declines at the film and TV entertainment and publishing divisions, partially offset by growth at cable-networks segment. Wall Street analysts had a consensus revenue estimate of $7.12 billion for the quarter.
Time Warner, which owns Turner Broadcasting and HBO, said revenues from networks segment increased 3 percent to $3.70 billion, reflecting 5 percent growth in subscription revenues, as the money cable-TV providers pay Time Warner to air its networks increased amidst international growth. Higher subscription revenues were partly offset by declines in ad revenues and content revenues. Operating income increased 11 percent from last year.
Revenues at films and TV entertainment slipped 4 percent to $2.68 billion, hurt mainly by lower theatrical performance and a decline in television licensing revenues.
Meanwhile, revenues from Time Inc., the publishing division, dropped 5 percent to $737 million, as subscription revenues fell. In early March, Time Warner revealed plans to spin-off Time Inc. into an independent public company to focus more on television networks and related businesses.
Time Warner also reaffirmed its 2013 full-year outlook, and expects percentage growth in adjusted net income to be in the low double digits, compared with $3.28 per share in 2012. Analysts currently project earnings of $3.68 per share for the year.
TWX is currently trading at $59.38, down $0.40 or 0.66%, on a volume of 7.6 million shares, on the NYSE. In the past year, the stock has trended in the range of $33.62 - $60.72, with a three-month average volume of 6.98 million shares.
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