Time Warner’s TV networks posted a difficult second quarter, with problems at the near-death WB dragging down ad sales growth.
For the three months ended June, Time Warner the networks unit posted $2.7 billion in sales, a 9% increase. But those results were artificially inflated by the consolidation of Court TV, which was acquired during the quarter. Exclude those results and the network’s sales increased just 6%.
The rough spot was advertising. The company reported TV ad growth of 8%. Without Court TV, however, ad sales rose just 3%.
The big problem was at The WB, whose ad sales dropped 9% compared to the same period last year. That’s little surprise given the slide in ratings and cutbacks in promotion as the network folds and re-emerges as The CW.
Morgan Stanley media analyst Richard Bilotti estimates that revenues at Turner Broadcasting System’s various networks increased 6% to $715 million.
License fees from cable operators was more steady, with the company posting a 9% increase to $1.5 billion. After adjusting for Court TV, growth came in at 8%.
The company said it booked $81 million in costs related to the shutdown of WB.
Time Warner’s cable systems posted stellar numbers.
Revenues rose 15% to $2.7 billion, based on strong gains in high speed Internet, digital video and new phone services. Average subscription revenue per basic cable subscriber rose a substantial 14% to approximately $91 monthly.
However, sales at the company’s AOL and movie divisions dropped, so company-wide revenue increased just 1% to $10.7 billion, but operating income increased at a much better rate, 7% to $2.7 billion.