Warner Bros. delivers for Time Warner in third quarter
Time Warner Inc. said Wednesday it had third-quarter profits of $822 million, a 57% increase compared with the same period a year ago, and revenues of $7.07 billion, a jump of 11%.
Much of the gains were driven by the strong box-office performance of "Harry Potter and the Deathly Hallows: Part 2." The last chapter of the long-running Warner Bros. franchise took in $1.3 billion around the world. For the quarter, Time Warner's filmed entertainment unit, which also includes television production, had revenues of $3.3 billion, up 17% from the third quarter of 2010. Operating income went from $209 million to $528 million.
But Time Warner Chief Executive Jeff Bewkes was quick to tell analysts that Warner Bros. was more than a one-man show.
"It wasn’t all about Harry at Warner Bros.," Bewkes told analysts during a conference call Wednesday morning. "Contagion" and "Horrible Bosses" were also strong performers for the studio, as was revenue from reruns of its hit sitcom "The Big Bang Theory."
Even though the current television season is not even two months old, Bewkes expressed confidence that Warner Bros.-produced new shows, including the sitcoms "Two Broke Girls" and "Suburgatory" and the drama "Persons of Interest," would be long-term moneymakers for the studio.
"Our syndication pipeline is built," Bewkes said, adding that a hit comedy is still the "holy grail" of the television business, with the potential to become "multibillion-dollar annuities."
Although Warner Bros. is on a roll, Time Warner's Turner Broadcasting is still going through some growing pains. Overall, Time Warner's networks group, which includes HBO, had revenues of $1.09 billion, an increase of about 6%. However, operating income fell 4% to $1.09 billion.
Although the new TNT original series "Falling Skies" was solid and "The Big Bang Theory" repeats are delivering for TBS, much of the other programming on the two networks is struggling.
"TBS and TNT ratings were softer than anticipated," said Time Warner Chief Financial Officer John Martin.
Bewkes also hinted that Turner Broadcasting would be willing to kick the tires of the NFL, which has talked about introducing a new eight-game package. However, he stressed that he would only buy NFL rights if the company could make money on it, saying he wasn't interested in a loss-leader.
Bewkes also took a little shot at Time Warner Cable, the nation's second-largest cable operator, which was spun off from Time Warner a little over two years ago. During its recent earnings call, Time Warner Cable suggested that growth prospects for the premium channel sector, which includes HBO, was slowing.
That, Bewkes said, was "kind of a backward-looking statement they made."
Bewkes has been frustrated with Time Warner Cable for not launching a new HBO service that allows subscribers to watch the channel on their iPads. Cablevision, another large cable operator, is also yet to sign a deal for the service, which is called HBO Go.
Although Bewkes did not call out either cable operator by name, he said he was "hopeful for their sake" that HBO Go would be available to their subscribers in the next few months.
-- Joe Flint
Photo: Daniel Radcliffe in "Harry Potter and the Deathly Hallows: Part 2." Credit: Warner Bros.