Time Warner Beats Estimates on Advertising Gains

It was revealed on Wednesday that Time Warner TWX, which owns the cable networks TNT and TBS among others, has reported 1Q earnings that, regarding gains in TV advertising, beat analysts' expectations. It was a good quarter for both the company and for the people producing ads, who will no doubt be celebrating with Mad Men-esque parties (although that show is an AMC production). Earnings basically rose 67 cents per share, while analysts had projects 64 cents. Sales also exceeded analyst predictions. TWX gets over 70% of its income from TV, something that has been helped of late by hit TV shows like The Big Band Theory. With people sat down to watch the adventures of Sheldon and wallow in nerd-related humor, the advertisers are able to have a field day. As a result, advertising at the networks went up 6%. In addition, subscription fees for TWX networks rose 5%. In total, sales went up 4.4% to $6.98 billion from $6.68 billion this time last year. The analyst estimate sat at $6.82 billion, so the company beat estimates here too. It doesn't end there. Time Warner's filmed-entertainment revenue went up a full 6.9% to $2.78 billion. That number was helped, rather bizarrely, by ticket sales for the February film Journey 2: The Mysterious Island. With the Harry Potter franchise / cash cow now at an end, TWX is desperately looking for something to fill the void. So far this year, Journey 2 has proved to be the unlikely hero, pulling in $101,911,345 so far. OK, so the budget was $79 million but, when you add foreign ticket sales of $221 million, the fill is a hit. Who would have thought that The Rock would really, genuinely come to the rescue in real life? On the minus side, TWX's publishing business, which puts out People, Sports Illustrated and Time magazines, went down 3.1%. Net income also declined 11% to $583 million, or 59 cents per share, from $653 million, or 59 cents per share, the previous year. Still, Time Warner went up 1.2% overall to $37.92 on Tuesday. Follow me @BCallwood.