Lower Profit & Revenue at Time Warner

NEW YORK: Time Warner saw its net income fall 33 percent in the second quarter, with growth at the networks segment offset by declines at the film and TV entertainment and publishing units.

Net income was down from Q2 2011’s $638 million to $430 million for the second quarter of this year. Revenue decreased 4 percent to $6.7 billion and adjusted operating income dipped 5 percent to $1.2 billion.

In its networks segment, revenue increased 4 percent to $3.6 billion. There were increases of 6 percent in subscription revenues and 2 percent in ad revenues, though a decline of 5 percent in content revenues. Adjusted operating income was up 9 percent to $1.1 billion, with higher revenues partly offset by increased expenses such as programming costs, which grew 3 percent.

Revenue was down 8 percent to $2.6 billion in the film and TV entertainment unit, due mainly to weaker releases by comparison of the year-ago period. The prior year had included the home-entertainment release of Harry Potter and the Deathly Hallows: Part 1 and the theatrical release of The Hangover Part II. These declines were offset partly by higher TV licensing revenues. Adjusted operating income was down 16 percent to $137 million and operating income was 13 percent lower at $134 million.

Jeff Bewkes, Time Warner’s chairman and CEO, said: “Across Time Warner, we’re continuing to make progress on our long-term goals, and we remain on track to meet our financial objectives for the year. This quarter, our results highlight the strength and potential of our networks and television production businesses, which generate the bulk of our revenues and earnings. We saw terrific performance at most of the Turner networks. For instance, TNT was the number one network on ad-supported cable, bolstered by another great NBA season and the introduction of original hits like Dallas. TBS was up 30 percent in prime time in its key demographic in the quarter, thanks in part to the success of The Big Bang Theory, which remains the number one sitcom on ad-supported cable. HBO’s original series like True Blood and Game of Thrones are continuing to see strong viewership. At the same time, HBO’s programming is continuing to garner critical acclaim, including receiving 81 Primetime Emmy nominations, the most of any network for the twelfth year in a row.”

Bewkes added: “On the television production side, it was another standout quarter for Warner Bros. During the recent upfront buying season, Warner Bros. secured orders from the broadcast networks for 16 returning series and 9 new shows, making it the top producer of network TV prime-time programming once again. And we’ve recently successfully syndicated a number of series, both to traditional and new SVOD buyers. Finally, reflecting our continuing commitment to shareholder returns and our confidence in our competitive position and growth prospects, this year we’ve returned about $2.0 billion of capital in the form of share repurchases and dividends.”