Media Earnings Beat Expectations on Higher Advertising and Digital
Time Warner just wrapped up its earnings call, and CEO Jeff Bewkes declared that high ratings, especially at the Turner Networks, means that he plans to drive a hard bargain for advertising and affiliate rates.
Bewkes says that the company is “in a great position as we head into the upfront” and has “great confidence as we enter our next cycle of affiliate negotiations at Turner.” Time Warner reaffirmed its full-year outlook, saying adjusted net income will grow by a low double-digit percentage.
The media giant beat expectations with four percent higher revenue of $7 billion, and net income of $583 million, down 11 percent from $653 million a year earlier. Results were pulled down by charges related to shutting down its Indian TV network and weakness at its magazine unit.
The TV division benefited from strong ad rates and higher affiliate fees, but struggled with higher content fees. DVDs continue to decline but selling TV series on Netflix helped bolster licensing revenue. As to the concern that Time Warner isn’t taking advantage of the full host of digital licensing opportunities, by refusing to license HBO content to Netflix and elsewhere online, Bewkes insisted “HBO Go will have a significant positive impact on business over time.” He noted that the digital app is successfully keeping viewers engaged
Time Warner isn’t the only company that benefited from digital and advertising increases — CBS is trading higher today after reporting better than expected—and better than EVER—first quarter results. The company saw a 39 percent increase in content licensing and distribution revenues, as well as a five percent increase in ad revenue.
And this morning Comcast, CNBC’s parent company, also reported better-than-expected results, bolstered by positive at results at NBC Universal. The company’s first quarter profit of 47 cents per share is up 32 percent from a year ago. And revenue at NBC Universal rose 18 percent.
The outlook is good from all of these companies heading into the “Upfronts” ad sales period, which means the crucial ad sales period could very well be its biggest yet.
Questions? Comments? MediaMoney@cnbc.com