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Time Warner Reports Higher Q1 Earnings

Time Warner reported higher first-quarter earnings as politics and the Final Four helped boost ad revenue at Turner Broadcasting.

Net income rose 25% to $1.214 billion, or $1.51 per share, from $970 million, or $1.15 a share a year ago.

Revenues were up 3% to $7.3 billion.

The numbers exceeded Wall Street estimates.

The company also reaffirmed its earnings guidance for the full year, saying adjusted earnings per share would be between $5.30 and $5.40.

“We’re off to a terrific start to 2016, as we benefit from the investments we’ve been making in great content and new capabilities in order to take advantage of the growing demand for high-quality video content around the world,” said CEO Jeff Bewkes in a statement.

At Turner, operating income increased 12% to $1.2 billion, with higher revenues partly offset by a 4% increase in programming costs largely related to sports. Marketing costs also rose to promote upcoming original series and the rebrand of TBS.

Turner revenues were up 7% to $2.9 billion. Subscription revenues were up 11% and advertising revenues rose 5%, with the news business showing the most notable gains during this presidential election season.

HBO’s operating income increased 4% to $477 million on higher revenues, offset by 11% higher programming costs and higher marketing and technology expenses related to the HBO Now OTT service.

Revenues were up 8% to $1.5 billion as domestic rates and subscribers rose.

“Turner aired cable’s first ever NCAA Men’s Division I Basketball Championship game, and Turner and CBS entered into an agreement with the NCAA to extend their television, digital and marketing rights to the NCAA Tournament through 2032,” Bewkes said. “CNN continued to build on its success by more than doubling its primetime audience in the quarter. Meanwhile, HBO continued to make strides both inside and outside the traditional TV ecosystem, including expanding its OTT reach to new platforms and new international territories.”

Operating income increased 31% to $424 million at Warner Bros., despite lower theatrical revenues. TV revenue was up and marketing costs and overhead were down.