Time Warner
reported higher third quarter revenue, driven by strength in its networks
segment, but net income fell as the company bought back some of its debt.
Net income
was $522 million, or 46 cents per share, down from $662 million, or
55 cents per common share.
Adjusted operating income rose 5% to $1.4 billion, exceeding Wall Street
expectations.
Revenues rose 2% to
$6.4 billion.
"Our strategy of
focusing on high-quality branded content continues to pay off. Our networks
businesses delivered robust growth in advertising and subscription revenues in
the quarter," said Jeff Bewkes, chairman and CEO of Time Warner. "In
television, Turner, HBO and Warner Bros. all debuted new hit shows, like Rizzoli
& Isles, Boardwalk Empire and Mike & Molly."
At Time Warner's
networks group, which includes Turner and HBO, operating income rose 23% to
$1.14 billion from $924 million as revenues rose 9% to $3 billion from
$2.76 billion.
Ad revenues
rose10%, with gains at the
entertainment networks offsetting a decline at the domestic news networks
including CNN, where ratings issues are being addressed, according to Bewkes.
Subscription revenues grew 9%. Programming costs increased 5% due largely to
higher original programming expenses, the company said.
Time Warner CFO John Martin said that the company expected advertising
growth to accelerate in the fourth quarter, benefitting from strong upfront sales
kicking in and a scatter market where prices are up in the 20% range.
Martin added that HBO Inc. had a loss of 1.5 million subscribers, butthat the unit would still have record revenues and profits.
Time Warner also
boosted its outlook for the full year, saying it expected the rate of increase
in its adjusted income to be in the high 20% range. Previously it expected
growth of at least 20%.
