‘The Lego Movie’ boosts Time Warner’s first quarter
The unexpectedly strong performance of “The Lego Movie” and continued strength at its HBO and Turner cable units helped boost first-quarter revenue and profits for Time Warner Inc.
Time Warner also increased its business outlook for the year saying its adjusted earnings per-share growth should be in the low-teens excluding the Time Inc. publishing unit which is being spun-off later this spring.
For the quarter, Time Warner posted profits of $1.29 billion, or $1.42 a share, an increase from the $754 million, or 79 cents a share for the same period in 2013. Revenue improved 9% to $7.5 billion.
“Warner Bros. picked up right where it left off last year,” said Time Warner Chief Executive Jeff Bewkes on a call with analysts Wednesday morning. Besides “The Lego Movie,” which has taken in $450 million at the box office, “300: Rise of an Empire” also delivered for the studio.
Revenue at Warner Bros. jumped 14% to $3.1 billion and operating income grew 40% to $369 million. Asked to comment on DreamWorks Animation Chief Executive Jeffrey Katzenberg’s recent comment that movies are not a growth business, Bewkes cracked, “maybe not for him ... he doesn’t make any money.”
The Turner unit, which includes TBS, TNT, CNN and TruTV, also had a solid quarter. Increases in subscriber fees for its cable networks helped boost revenue 5% to $2.6 billion. Operating income was up 6% to $900 million.
However, Bewkes expressed concern about the performance of TNT and TruTV. TNT, Bewkes said, has not taken enough “creative risks” with original programming. TNT has struggled to create shows that attract younger viewers such as AMC’s “The Walking Dead” or FX’s “Sons of Anarchy.”
Turner is under new management. John Martin, the former chief financial officer of Time Warner, is now chief executive of Turner. There have also been some recent departures, including Steve Koonin, who had headed entertainment for the Turner unit.
Thanks to “Game of Thrones” and “True Detective,” HBO saw revenue growth of 9% to $1.3 million and operating income increased 47% to $464 million. Bewkes said HBO’s recent sale of old shows to Amazon will give the network more money to invest in original programming.
Follow Joe Flint on Twitter @JBFlint.
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