'Potter' Helps Time Warner Conjure 57% Earnings Growth In Q3

Publish date:

Time Warner reported higher earnings thanks to the Harry Potter franchise and expects to finish the year stronger than it previously forecast.

Third-quarter net income rose 57% to $822 million, or 78 cents a share, compared to $522 million, or 46 cents a share, exceeding analyst expectations.

Revenues rose 11% to $7.1 billion, which the company said was its highest growth rate since the third quarter of 2007.

Time Warner raised its business outlook for the full year, saying that it expected earnings per share to grow to be in the high teens. Last quarter, it said it expected growth to be at least in the low teens for 2011.

"Our results demonstrate the success of Time Warner's focus on investing in great content that audiences love and leading the evolution of how it's delivered," said CEO Jeff Bewkes.

Bewkes said that its Warner Bros. shows, including new shows 2 Broke Girls, Suburgatory and Person of Interest, have had an excellent start in the new television season. And "with our partner CBS, we recently concluded new licensing deals for The CW network with Netflix and Hulu that exemplify our value-enhancing approach to new digital platforms and reinforce the increasing demand for our high quality content."

Time Warner's networks division, which includes Turner Broadcasting and HBO, reported operating income of $1.09 billion, down 4% from $1.14 billion a year ago. The company blamed higher programming and marketing costs, including higher sports programming costs.

Revenues rose 7% to $3.2 billion from $3 billion. Advertising revenues were up 9% or $74 million. Subscription revenues were up 6%, or 4112 million.

Operating income for the company's Filmed Entertainment division rose 153%, thanks mainly to the performance of Harry Potter and the Deathly Hallows: Part 2 and The Hangover Part II.

Read the full story at B&C here.