Time Warner reported higher first quarter net income on gains from The Lego Movie, plus gains at its TV properties.
Net income rose 71% $1.292 billion, or $1.42 a share, in the first quarter from $754 million, or 80 cents a share, a year ago. Revenue rose 9% to $7.5 billion.
Excluding Time Inc., the magazine division Time Warner is spinning off, adjusted operating income grew 12% and adjusted earnings per share were up 20%.
“We are off to a very strong start in 2014, with results that demonstrate both the returns we can achieve on our investments in great storytelling and the growth potential of our businesses,” Jeff Bewkes, CEO, said in a statement. “Turner also made history by bringing the NCAA Men’s Basketball Final Four to cable for the first time ever. The success of the NCAA Tournament also helped TBS maintain its position as ad-supported cable’s number on network in primetime among adults 18 to 34 and 18 to 49. It also showcased the importance and vibrancy of our TV Everywhere initiatives, with a more than 40 percent increase in streams for our March Madness Live service over last year.”
Bewkes also pointed to Adult Swim, "which again finished the quarter as the number one ad-supported cable network in total day for adults 18 to 34. And CNN reaffirmed that it is the place the world goes for authoritative coverage during major news events, with delivery in its key demographic up over 50% in March.”
Time Warner also updated its full-year outlook excluding the results from Time Inc. The company said it expected adjusted diluted income per common share from continuing operations to be in the low teens from last year’s $3.51 per share.
Operating income at Turner rose 6% to $900 million in the quarter, including a $13 million gain from the sale of Zite.
Turner’s revenue rose 5% to $2.6 billion. Subscription revenue was up 7% while content revenues were down 15%.
Ad revenues were up 5% as gains at Turner’s domestic networks were offset by foreign currency changes. The ad sales increase was mainly due to having more of the NCAA Men’s Basketball Championship.
Programming costs grew 9% reflecting the higher costs from March Madness plus an increase in original programming costs.
HBO’s operating income increased 11% to $464 million. Revenues rose 9%, with an 8% increase in subscription revenues and a 13% gain in content revenues. Domestic sub rates were higher in the quarter and home video revenues from season three of Game of Thrones boosted content revenues.
Warner Brothers operating income increased 40% and its revenues rose 14% led by the release of The Lego Movie.
The company said it repurchased 20 million of its share for $1.3 billion this year through April 25.
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