Time Warner Inc. posted earnings that beat analysts’ estimates for a 25th straight quarter, driven by the broadcast of the NCAA basketball tournament and higher fees from pay-TV operators to carry channels like CNN and TNT.
First-quarter profit excluding some items was $1.19 a share, New York-based Time Warner said Wednesday in a statement. Analysts had predicted $1.09, based on the average of estimates compiled by Bloomberg.
The results validated Chief Executive Officer Jeff Bewkes’s strategy of charging higher distribution fees for its cable networks while cutting jobs to reduce costs. After Bewkes spun off assets in recent years, Time Warner shrunk down to its Turner cable channels, HBO and Warner Bros.
“The slimmed down Time Warner is all about the cable networks and the studio,” said Paul Sweeney, an analyst at Bloomberg Intelligence. “This quarter showed that these businesses are hitting on all cylinders.”
Turner’s operating income of $1.1 billion, up 26 percent for the quarter, was the highest ever for the division, boosted by increasing advertising revenue. The NCAA Tournament, which was shown on CBS Corp. and on Time Warner’s TBS, TNT and truTV in March and April, was the most-watched in 22 years.
Turner announced in October a plan to eliminate 1,475 positions, about 10 percent of its global workforce.
“We accomplished a lot in the quarter, led by Turner, which had its best quarter ever, with audience growth across a number of its networks,” Bewkes said in the statement.
Time Warner were little changed at $84.97 at 12:53 p.m. New York Time. The shares had dropped less than 1 percent this year through Tuesday, while the Standard & Poor’s 500 Index gained 2.6 percent.
HBO’s profit fell 1.3 percent to $458 million as higher costs for programming, distribution and marketing offset an increase in revenue from higher subscription rates. The premium channel has been marketing its new Web-only version of HBO, which was introduced in April, after the quarter ended.
“The real thing we want to focus on, going forward in the second half of the year, is marketing our product to the consumer because we think there is a huge audience out there for it,” HBO Chief Executive Officer Richard Plepler said during an earnings call.
Hit show “Game of Thrones” also returned on HBO after the end of the quarter. It attracted an audience of 18.1 million people in its fifth season premiere, including viewers who watched up to a week after the April 12 debut.
Sales at Warner Bros. studio increased 4.3 percent to $3.2 billion, helped by licensing the online rights of the show “Friends” to the streaming service Netflix Inc. last fall and the success of the film “American Sniper.”
The company also reaffirmed its full-year profit forecast of $4.60 to $4.70 a share.
Bewkes is trying to keep the company expanding and the stock price rising after rejecting a $75 billion buyout offer last summer from Rupert Murdoch’s 21st Century Fox Inc.