Turner Nets Boost Q3 Ad Sales Haul

Despite posting a 21 percent drop in third-quarter profit, Time Warner beat analysts’ expectations thanks in large part to strong advertising-sales performances at its cable networks and publishing units. Excluding a $295 million loss related to debt refinancing costs, Q3 earnings rose to 62 cents a share from 53 cents. Analysts had projected earnings to be flat versus the prior-year period. Revenue rose 2 percent to $6.38 billion, on consolidated ad sales gains of 9 percent.The Turner Networks division, which includes TNT, TBS, CNN and the premium service HBO, increased revenue 9 percent versus the third quarter of 2009, to $3 billion. Ad sales were up 10 percent, as the Turner nets took in $ 848 million in the quarter despite some ratings challenges.Per Nielsen, TNT grew its prime-time deliveries in Q3 by 7 percent, taking second place in the period with an average nightly of 2.55 million viewers. Adults 25-54 dipped 1 percent to 1.1 million viewers, while the 18-49 demo was off 3 percent to 937,000.TBS experienced greater declines in its core demos, as viewers 18-34 fell 10 percent to 482,000, while the 18-49 set was off 9 percent to 873,000. The truTV property boosted 25-54s by 11 percent, with an average prime time delivery of 581,000, while viewers 18-49 were up 7 percent to 555,000. Cartoon Network enjoyed a strong quarter, growing 10 percent in total-day and increasing its share of kids 2-11 by 12 percent versus the year-ago period. CNN continued to plummet in prime, losing nearly half (46 percent) of its nightly deliveries with an average draw of 513,000 viewers. Adults 25-54 fell just as hard, with 48 percent of the core news demo disappearing in Q3.Operating income at the networks group jumped 23 per cent to $1.14 billion.At Time Inc., ad sales grew 5 percent to $478 million, while operating income for the publishing unit jumped 45 percent to $141 million. Cost reductions went a long way toward offsetting lower subscription sales.In August, Time Warner named Meredith exec Jack Griffin as chief executive of the magazine unit, replacing Ann Moore. In a conference call with investors, Time Warner CEO Jeff Bewkes said the media conglomerate would kickstart a new premium video-on-demand movie service in the second quarter of 2011. “It just comes down to finding the right window at the right prices,” Bewkes said. While Bewkes dismissed the impact cord-cutting may have on subscription TV revenue, the HBO unit––a division that includes the flagship premium net as well as Cinemax––has lost 1.5 million total subs since the year began. Time Warner chief financial officer John Martin said the losses had to do with a major distributor (i.e., DirecTV) that is no longer promoting the service to its customers.Martin added that he believes the standoff with the carrier will be resolved in due course.Time Warner said it now expects full-year 2010 adjusted earnings from continuing operations will rise “in the high 20s,” on a percentile basis. In February, the company forecast growth in the mid-teens.In early afternoon trading, shares of TWX were down 2.5 percent to $31.60. Since the year began, Time Warner’s share price is up 9 percent.

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Turner Nets Boost Q3 Ad Sales Haul

Anthony Crupi

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