Time Warner Inc posted revenue and profit growth that was better than had been expected for the first quarter as its programming for March Madness helped to drive a growth in audience in its Turner segment.
Time Warner announced that the strength of Time Warner helped offset the declines of operating income at Home Box Office and Warner Bros.
Time Warner shares have increased by 37% over the last year and on Wednesday in premarket trading were up 1.9%.
Earlier in April, the company started selling a version of HBO that was broadband only called HBO Now, through its two digital distributors, like Apple Inc and traditional partners like Cablevision.
The online offering of HBO helps the company compete for the expanding audience of people who are consuming programming online from Netflix and others. However, the move also risks alienating businesses that have been distributing Time Warner programming for a number of decades.
For the March 31 ending quarter, Time Warner posted earnings that reached $970 million equal to $1.15 per share, which was down from $1.28 billion equal to $1.42 per share, for the same period one year ago. Excluding certain items, earnings equaled $1.19 per share.
Revenue was up 48% to reach $7.13 billion. Analysts had been expecting $1.09 per share in earnings with revenue reaching $7 billion.
Turner revenue ended the quarter up 4.5% or $2.7 billion as revenue from advertising grew by 4%. Time Warner said that the NCAA Tournament and new business helped the company grow.
Warner Bros is the largest top-line contributor and posted growth of 4.3% in its revenue to end the quarter at $3.2 billion, as revenue from television licensing grew thanks to the sale of video on demand subscriptions for Friends.
HBO revenue was up $1.4 billion from last year’s $1.3 billion.