Warner Profit Jumps; Hit Records Credited

Warner Communications reported Monday that its third-quarter earnings jumped 22.6%, led by its most profitable quarter ever in recorded music that included releases from Madonna, Peter Gabriel and Genesis.

The company said it had mixed results from the domestic film box office but posted strong revenue growth internationally from releases that included “Cobra,” “Police Academy 3” and “The Color Purple.”

For the three months ended Sept. 30, Warner said it had net income of $41.8 million, compared to a profit of $34.1 million a year earlier.

Revenue for the quarter rose 24% to $693.3 million from $560.5 million a year earlier.

Operating income from Warner’s recorded music and music publishing division reached $41 million, up 74% from $23.6 million a year ago and an all-time high for any quarter in the division’s history.

Madonna’s “True Blue” was released late in the second quarter, and the latest results also included 1-million-selling releases from Gabriel, Genesis, Anita Baker, David Lee Roth and Steve Winwood.

The filmed entertainment division posted third-quarter operating income of $50.1 million, down 9% from an all-time high of $54.9 million in 1985.

Warner’s cable and broadcasting division reported operating earnings of $3.9 million, down 39% from $6.4 million a year ago, while operating income from its publishing and related distribution division tumbled 44.2% to $2.4 million from $4.3 million a year earlier.

For the first nine months of the year, Warner said its net income rose 47% to $123.8 million from $84.1 million for the same nine-month period of 1985.

Nine-month revenue rose 27% to $2.03 billion from $1.59 billion.

The nine-month figures included an after-tax gain of $26.3 million in 1986 and $8.2 million in 1985 from the sale of Hasbro Inc. stock.