Warner Communications Posts $89.1-Million Profit

With three of Warner Communications’ businesses turning in record results, the giant entertainment company Thursday reported net income of $89.1 million for the three months ended March 31, up 37% from the previous year. First-quarter revenue rose 22% to $960.8 million, compared to $788.3 million last year.

New York-based Warner said its filmed entertainment and recorded music businesses posted their best earnings performance in any quarter in the company’s history. Warner’s cable television business also set a record by more than doubling last year’s earnings to $15.5 million. However, losses in Warner’s 42.5%-owned broadcasting holdings reduced earnings to $13.2 million for the cable and broadcasting division. In the first quarter a year ago, the unit earned $5.3 million.

Operating Income Rises 50%

Only the publishing division lagged, with a 20% decline in first quarter earnings to $2 million, despite strong Warner Books sales of Sidney Sheldon’s “Windmills of the Gods” and Elmore Leonard’s “Bandits.”

The Warner Bros. filmed entertainment division reported a 17% increase in operating income to $55.3 million, boosted by the success of two films overseas: Steven Spielberg’s “Innerspace” and Stanley Kubrick’s “Full Metal Jacket.” A current Warner Bros. hit, David Geffen’s “Beetlejuice,” was released late in the quarter and is expected to make a sizable contribution to the second-quarter results.

During the first quarter, operating income rose 50% to $70.5 million for the recorded music and music publishing division, spurred by a 70% increase in unit sales of compact discs. Audio cassette sales also spurted in the United States, increasing 30% over unit sales in the same quarter a year ago. The company cited million-unit sales by artists such as David Lee Roth, INXS, Debbie Gibson, George Harrison and Foreigner for contributing to the division’s strong results.

Corporate general and administrative expenses rose about 10% to $18.2 million for the first quarter, while net interest expense rose 56% to nearly $4 million.

Earlier this week, Warner ended a five-week marathon of talks with Lorimar Telepictures concerning a possible acquisition, after Lorimar apparently spurned Warner’s offered price--believed to be below $15 per share.

Warner shares closed at $32.25, down $1.125 on the New York Stock Exchange, with 830,600 shares changing hands.