Time Warner Has Most Profitable Quarter Ever
Time Warner enjoyed the most profitable quarter in its history thanks to an ad recovery and strong movie performance. Net income rose to $725 million, up from $660 million in the prior period. Revenue was up 5%, to $6.3 billion, for the quarter, the company's biggest gain in almost two years.
Time Warner's cable TV unit also showed a remarkable rise in ad revenue, up 9% or $67 million on the year ago period thanks to stronger scatter pricing and growth at international operations at international operations. The increase is a major sequential improvement compared to fourth quarter when the unit saw a 4% dip in ad revenue. CNN's news operations saw a decrease in ad revenue for the period on lower ratings.
Profit at the networks unit, which just signed a deal with Conan O'Brien to host a late-night show on TBS, was up 28% -- or 22%, excluding a $59 million gain related to an ownership change at HBO Central Europe. Adjusted operating income was $1.1 billion. Programming costs fell 3% because of the timing of licensed programming at HBO and Turner, and original programming at Turner. During the period, Turner joined forces with CBS to buy the NCAA. The two partners will have rights for 14 years.
Subscription revenue rose 7%, or $131 million, partly due to growth at international channels and favorable foreign exchange rates. Content revenue from program and product sales grew 22%, or $46 million, thanks to HBO hit Entourage. Revenue at the networks unit rose 9%, or $252 million, to $3 billion.
Elsewhere, the publishing segment revenue fell 1%, to $799 million, while revenue at the film unit grew 2%, to $2.7 billion. The corporate division also recorded two charges; $11 million related to securities litigation by former employees and $7 million related to government investigations.
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