Time Warner posts 10% profit decline despite revenue growth
Although revenue was up, higher costs for rights to sporting events and a less than spectacular performance by Warner Bros. meant smaller profits for media giant Time Warner Inc.
The addition of the NCAA college basketball tournament meant more advertising dollars at Time Warner’s Turner networks. But it also increased programming costs. That and some disappointing movie releases from Burbank-based Warner Bros., including “Hall Pass,” led to a nearly 10% drop in net income to $653 million for the company’s first quarter. Revenue for the quarter was up 6% to $6.7 billion.
Cable networks Turner and HBO led the way as usual, with revenue of $3.5 billion, an 18% gain. Subscriber fees jumped 9% to $167 million, advertising was up 31% to $242 million and the sale of programming such as HBO’s “Boardwalk Empire” generated $120 million in revenue, a 48% gain. Programming costs were up almost 40% mostly because of the NCAA deal Turner signed in partnership with CBS.
At Warner Bros., revenue dipped 3% to $2.6 billion. The decline was attributed to a lack of blockbusters compared with the first quarter of 2010, when box office hits “The Blind Side” and “Sherlock Holmes” were still going strong.
On the publishing side, Time Inc., the parent company of Time, People and Sports Illustrated, had revenue of $798 million, the same as the first quarter of 2010.
