Time Warner profit falls 11% on bad ‘Luck’ while revenue climbs
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The cancellation of HBO’s ‘Luck’ and the closing of a TV channel in India put a damper on an otherwise solid first quarter for media giant Time Warner Inc.
Time Warner reported a profit of $583 million for the quarter ending March 31, compared with $653 million for the same period in 2011, an 11% drop. Revenue was up 4% to $7 billion.
“We’re off to a great start to the year, and we’re benefiting from strong momentum for our content across our businesses,’ said Time Warner Chief Executive Jeff Bewkes.
Much of the revenue gain can be attributed to stronger subscription fees and ad revenue at the Turner networks, including TNT and TBS. The company said revenue at its cable networks was $3.6 billion, a 3% jump. Ad revenue was up 6% thanks to commercial dollars from the NCAA basketball tournament which was carried on TNT, TBS and TruTV.
However, programming costs for Time Warner’s networks unit rose 6% in part because of the rights fees for the NCAA tournament. The company also took at $35 million write-down for ‘Luck,’ the low-rated HBO series about horse racing that was cancelled in the midst of its first season after several horses died during production.
Operating income in the networks unit dropped 2% to $1.1 billion. Time Warner said those results included a charge of $58 million related to Turner’s decision to close its entertainment channel in India.
Revenue at Warner Bros. jumped 7% to $2.8 billion thanks to the strong performance of ‘Sherlock Holmes: A Game of Shadows’ and higher fees for selling TV shows.
-- Joe Flint