Dear Harry Potter: 'Thanks!' - Time Warner (TWX); Co. Posts 'Beat and Raise' Q2

August 3, 2011 9:10 AM EDT
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Time Warner (NYSE: TWX) shares are trading modestly higher early Wednesday following strong second-quarter earnings. Upside is being slightly offset by a somewhat weak raise to its outlook.

Revenue for the quarter ended June 30 increased 10.2 percent from $6.377 billion in the same period last year to $7.03 billion. Analysts had been expecting sales of $6.81 billion during the quarter.

Net income increased nearly 14 percent to $638 million, or 59 cents per diluted share. Adjusting for certain items, earnings were a more robust 60 cent per common share, 4 cents better than consensus estimates calling for 54 cents per share.

Chairman and CEO Jeff Bewkes said, "We had another successful quarter and remain on track to meet our financial goals for the year. Our continued investment in our content and brands is paying off. This quarter included such hits as the premiere of TNT’s Falling Skies, HBO’s breakout series Game of Thrones, People magazine’s and CNN’s royal wedding coverage and Warner Bros.’ The Hangover Part II. More recently, the final Harry Potter film has been a tremendous box office and critical success. In the 2011-2012 upfront, advertisers recognized the outstanding reach and appeal of Turner’s cable networks by making significantly higher commitments across its portfolio. And HBO, which has the strongest programming lineup in its history, just received the most Primetime Emmy nominations of any network for the 11th year in a row."

Network revs increased 9 percent to $3.5 billion in the quarter, Filmed Entertainment rose 13 percent to $2.8 billion, and Publishing increased 3 percent to $946 million. Adjusted operating income rose 6 percent to $1.3 billion.

Filmed entertainment gains were led mainly by releases of Mortal Kombat 9 and LEGO Pirates of the Caribbean: The Video Game, as well as higher home entertainment revenue driven by the release of Harry Potter and the Deathly Hallows: Part 1.

Since the beginning of 2011, Time Warner said it repurchased 65 million shares of its common stock for $2.3 billion.

Looking ahead, Time Warner increased its outlook for fiscal 2011 earnings growth from low-teens to "at least" low-teens.

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