Time Warner posts 7 pct rise in 2Q earnings as ad revenue recovers, raises full-year forecast

Time Warner posts rise in 2Q earnings, boosts view

NEW YORK — A rebound in advertising markets and strong box office results helped lift Time Warner Inc.’s second-quarter profit 7 percent, the media conglomerate said Wednesday.

The results topped Wall Street expectations, and Time Warner signaled growing confidence by boosting its full-year profit forecast.

The company’s shares edged up 11 cents to close at $32.47 Wednesday.

Time Warner’s results offered more evidence that businesses have started spending again to reach customers after cutting back during the recession. At the company’s cable channels, which include CNN, TBS, the Cartoon Network and others, ad revenue was up by $126 million, or 14 percent, over the same quarter a year ago.

That mirrors a 9 percent rise in ad sales at broadcast giant CBS Corp., which reported second-quarter results Tuesday. The next snapshot of ad spending will come Thursday morning from Viacom Inc., owner of the MTV and BET cable networks.

Even Time Warner’s magazines, which face a long-term threat from competition online for both readers and advertisers, saw a modest 4 percent increase in ad sales.

Across the entire company, ad revenue was up 11 percent, “its highest rate in almost six years,” CEO Jeffrey Bewkes told analysts on a conference call.

Also contributing to revenue growth was a stronger slate of films from the Warner Bros. movie studio, including “Clash of the Titans,” which grossed an estimated $492 million in theaters and “Sex and the City 2,” which brought in $280 million.

Overall, Time Warner reported net income of $562 million, or 49 cents per share, for the three months ended June 30. That’s up from $524 million, or 43 cents, a year ago.

Removing one-time items, earnings came to 50 cents per share, while analysts expected 45 cents, according to Thomson Reuters.

Revenue climbed 8 percent to $6.38 billion, the biggest increase in two years. Analysts expected revenue of $6.2 billion.

Revenue at Time Warner’s cable stations, which includes the fees that it charges cable providers to run its channels, rose 11 percent to $3.2 billion, while the unit’s operating profit jumped 14 percent to $981 million.

Film entertainment revenue climbed 8 percent to $2.5 billion, with a 21 percent jump in operating profit to $173 million.

In publishing, which includes Time Inc. magazines such as People and Sports Illustrated, revenue was flat at about $919 million and cost cutting helped lift operating profit 50 percent to $153 million.

With more than half the year behind it, Time Warner said it expects its earnings per share will end the year up at least 20 percent from 2009. In May, the company had forecast growth on a percentage basis in the mid-teens.

The new forecast suggests earnings of about $2.20 per share, excluding any one-time charges or gains. That’s roughly in line with Wall Street estimates.