Q1 Profit Down 11 Percent at Time Warner

NEW YORK: Time Warner’s first-quarter earnings were down 11 percent, due in part to a $35 million impairment charge for the cancellation of the HBO original series Luck.

Revenue was up 4 percent to $7 billion and adjusted operating income increased 6 percent to $1.4 billion. This growth was fueled by gains at its cable networks. Cable networks revenues gained 3 percent to $3.6 billion. Adjusted operating income increased 2.8 percent at the networks, reaching $1.2 billion. Ad revenue rose 6 percent. Content revenue was down 18 percent, due in part to lower sales of HBO programming, which in the prior year included a domestic cable sale for Sex and the City. 

Revenues for film and TV entertainment increased 7 percent to $2.8 billion, due largely to a stronger theatrical slate, higher TV licensing revenues and the SVOD availability of TV shows. In the segment, adjusted operating income rose 39 percent to $215 million.

Jeff Bewkes, chairman and CEO, said: “We’re off to a great start to the year, and we’re benefiting from strong momentum for our content across our businesses. In the quarter, we saw impressive viewership gains at many of Turner’s networks, including TBS ranking as the number one network on cable among its key demographics. HBO programming is getting even stronger, with fantastic ratings for the second season of Game of Thrones and great critical and popular acclaim for new series like Veep and Girls. Warner Bros. is having a terrific 2011-2012 TV season, with excellent performance from returning shows like The Big Bang Theory and Two and a Half Men as well as new breakout hits like 2 Broke Girls and Person of Interest, which positions it extremely well for the upcoming season. And Warner Bros. plans to follow its film successes from the first quarter with highly-anticipated releases over the course of the year, including Tim Burton’s Dark Shadows, Christopher Nolan’s The Dark Knight Rises, and the first installment of Peter Jackson’s The Hobbit. Reflecting our confidence in our competitive position and growth prospects, we’ve repurchased almost $900 million of our stock so far this year.”