Time Warner beats expectations on revenue rise

Time Warner revised its 2010 forecast and expects adjusted earnings to be up at least 20 percent from a 2009 EPS base of $1.83.

The media conglomerate benefited from a 14 percent increase in advertising revenue at its network division, which includes Turner Broadcasting, and stronger movie ticket sales from "Clash of the Titans" and "Sex and the City 2".

"The advertising recovery has clearly helped reaccelerate the growth rate of Time Warner," said Fred Moran, an analyst with Benchmark Co who has a "buy" rating on Time Warner.

One of Time Warner's media peers CBS Corp beat revenue and profit expectations on Tuesday [ID:nN03183210] and said it expects the strong growth in advertising revenue to continue through the year.

"I think it shows media advertising has certainly bounced off the bottom," Moran said. "But there remains a question of sustainability of the state of the overall economy and consumer demand."

Time Warner reported net income of $562 million, or 49 cents a share, compared with $524 million, or 43 cents per share, from the year-ago period. Adjusted earnings of 50 cents a share beat analysts average estimate of 45 cents, according to Thomson Reuters I/B/E/S.

Revenue, which gained 8 percent to $6.4 billion, also beat Wall Street's consensus of $6.2 billion.

"It's a solid, clean, nice beat," said David Bank, an analyst with RBC Capital Markets. "Given the concerns over the macro-economy right now, it's a really strong result. At this point one would think it would bode pretty well."

Bank has a "buy" rating on Time Warner.

Revenue at its networks division rose 11 percent to $3.2 billion.

At its filmed entertainment segment that encompasses Warner Brothers, revenue increased 8 percent to $2.5 billion.

Publishing revenue from its magazine stable that includes People and Time, was flat at $919 million, though ad revenue rose 4 percent.

(Reporting by Jennifer Saba, editing by Maureen Bavdek)

WhatsAppFacebookTwitterLinkedinBeloudBluesky