Time Warner’s Earnings Bright Spot: Cable Nets
Time Warner CEO Jeff Bewkes today was as upbeat about the cable-television advertising outlook Wednesday as Viacom’s Philippe Dauman was concerned last week.
On Time Warner’s second-quarter earnings conference call with analysts, Mr. Bewkes crowed about Turner Broadcasting’s performance in the second quarter.
Despite what appears to be a weakening economy, Turner registered an 11% increase in ad sales. Upfront sales for the next TV season came in strong, with high-single digit increases in pricing and double digit increases in volume. And so far, the scatter market is pacing ahead of the upfront in terms of pricing, Mr. Bewkes said.
Mr. Bewkes specifically pointed to Time Warner’s Networks division—which include Turner and HBO—as among the units outperforming expectations given the economic conditions.
“Turner is operating at the top end of the television universe,” Mr. Bewkes said.
Last week, Viacom CEO Mr. Dauman told analysts covering that the scatter market had gone quiet in the second half of the second quarter, which left Viacom’s networks, including MTV, BET and Comedy Central with a small 1% increase in ad sales for the quarter.
Overall, Time Warner’s second-quarter earning fell 26% on lower results from AOL and the company’s magazine division.
The company reported net income of $752 million or 22 cents a share. Revenue rose 5.2% to $11.6 billion, and the company affirmed its end-of-year earnings targets.
The networks division recorded operating income of $860 million, up 15% from $746 million, as revenues rose 9%to $2.8 billion.
Time Warner Cable income rose 9% to $1.6 billion from $1.4 billion as revenue increased 7% to $4.3 billion. The cable operator had a record increase in revenue generating units during the quarter. High speed data sales rose 12% and voice was up 39%.
AOL revenues dropped 16% to $1.1 billion. Income at the online unit fell 28% to $350 million.