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Time Warner 3Q earnings up on cable TV strength

Associated Press Published: November 7, 2012
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NEW YORK (AP) — Time Warner said Wednesday that its third-quarter earnings grew 2 percent, as a strong performance in its cable television channels offset declines in the Warner Bros. movie business following the final Harry Potter movie last summer.

Net income was $838 million, or 86 cents per share, higher than the 82 cents expected by analysts surveyed by FactSet. That compares with $822 million, or 78 cents a share, a year ago.

Revenue fell 3 percent to $6.84 billion, short of the $6.89 billion expected.

Television networks such as HBO and TBS saw 7 percent growth in the fees paid by cable and satellite distributors to carry the channels. The company said last month's extension of rights to carry Major League Baseball games will help it command higher fees as existing deals expire.

Time Warner said the success of "The Big Bang Theory" reruns on TBS is helping to lift the channel's entire schedule, as the network can promote new shows during commercial breaks. But the timing of certain sports events shown on Turner channels hurt advertising revenue, which fell 1 percent despite better rates in the U.S. It was also hurt by the shutdown of some channels overseas and by changes in currency-exchange rates, as ad sales made abroad converted into fewer dollars.

The Warner Bros. studio had a strong quarter with the release in theaters of the latest Batman movie, "The Dark Knight Rises." But that wasn't enough to match the comparison period in 2011, which benefited from "Harry Potter and the Deathly Hallows: Part 2" and license fees for "The Big Bang Theory" and "Friends" in reruns. The recent quarter saw an increase in video-on-demand revenue, much of it in licensing fees from Netflix Inc.

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