'The Hobbit,' NCAA Tournament Boost Time Warner Earnings, But Revenue Flat
The popularity of "The Hobbit: An Unexpected Journey" and the NCAA Tournament propelled Time Warner to an increase in its earnings for the first fiscal quarter of 2013, though revenue was flat from the year before.
The company reported earnings per share of $0.82, exceeding predictions of $0.75. Its Networks division, encompassing Turner Broadcasting and HBO, as well as its Film and TV Entertainment, spanning its film and TV studios, were the two drivers of growth.
Income from the Film and TV division rose 23 percent thanks to the success of Peter Jackson's first "Hobbit" film, as well as "The Ellen Degeneres Show" and TV's two most successful new series – "Revolution" and "The Following." Lower marketing costs also helped offset the weaker performance of the studio's non-"Hobbit" films.
"The Hobbit" grossed more than $1 billion at the global box office and is the fourth most successful film in Warner Bros. history. The second film in the planned trilogy will open in December.
Income from Turner and HBO rose 11 percent thanks largely to the NCAA Tournament, which TBS, TNT and truTV aired along with CBS. It was the most watched tournament in 19 years.
"We're off to a strong start in 2013, making us even more confident in our full-year outlook," CEO Jeff Bewkes said in a statement. These results reflect the ongoing strength of our content, particularly in television."
Time Warner's maligned publishing division, Time Inc., again demonstrated why Bewkes is so keen to spin it off as a separate company. It reported a loss for the quarter due to a decline in subscription and "other" revenues. Advertising revenue increased two percent, but was more than the offset by the aforementioned declines.
Revenue across the company was even with the same quarter a year ago, as both the publishing division and the film and TV studio reported declines. The studio generated less revenue because its movies made less money in theaters and due to a decline in international syndication opportunities.
Revenue increased at Turner and HBO thanks to the NCAA Tournament.