'Lego Movie' Helps Time Warner Build Strong Profit

(RTTNews) - Media and entertainment giant Time Warner, Inc. (TWX) reported Wednesday a profit for the first quarter that surged from last year, with revenues lifted by blockbuster films including "The Lego Movie." The success of HBO's critically acclaimed "True Detective" series also boosted results.

Adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also raised its adjusted earnings growth forecast for the full-year 2014.

"We are off to a very strong start in 2014, with results that demonstrate both the returns we can achieve on our investments in great storytelling and the growth potential of our businesses. Excluding Time Inc., which we expect to spin off as an independent publicly-traded company this quarter, we grew first quarter Revenues by 10%, Adjusted Operating Income by 12%, and Adjusted EPS by 26%," Chairman and CEO Jeff Bewkes said in a statement.

The New York-based company reported net income from continuing operations of $1.29 billion or $1.42 per share for the first quarter, sharply higher than $754 million or $0.79 per share in the prior-year quarter.

Excluding certain items, adjusted income from continuing operations for the quarter was $829 million or $0.91 per share from $731 million or $0.76 per share in the year-ago quarter.

On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $0.88 per share for the quarter. Analysts' estimates typically exclude one-time items.

Excluding Time, Inc., which is being spun-off into an independent, publicly traded company, income from continuing operations was $1.50 per share and adjusted earnings was $0.97 per share.

Revenues for the quarter increased 9 percent to $7.55 billion from $6.94 billion in the same quarter last year, and topped twenty-three Wall Street analysts' consensus estimate of $6.61 billion.

Revenues, excluding Time Inc., increased 10 percent to $6.8 billion, due to growth at Warner Bros., Turner and Home Box Office.

Turner revenues grew 5 percent to $2.59 billion, aided by a 7 percent growth in subscription revenues and a 5 percent rise in advertising revenues, partially offset by a decline of 15 percent in content revenues.

Home Box Office revenues increased 9 percent to $1.34 billion, reflecting increases of 8 percent in subscription revenues and 13 percent in content revenues.

Warner Bros revenues improved 14 percent to $3.07 billion, primarily due to a stronger theatrical slate, led by The LEGO Movie and 300: Rise of an Empire.

Time, Inc. revenues edged up 1 percent to $745 million from the year-ago quarter. The company's separation of Time Inc. is expected to be completed in the second quarter of 2014.

Operating margin for the quarter improved 530 basis points to 25.6 percent from last year's 20.3 percent.

Separately, the company's Board of Directors declared a regular quarterly cash dividend of $0.3175 per share of common stock, payable on June 15 to stockholders of record on May 31, 2014.

Looking ahead to fiscal 2014, Time Warner said it now anticipates percentage growth rate in adjusted earnings per share from continuing operations to be in the low teens off a 2013 adjusted earnings per share base of $3.51. Street is currently looking for full-year 2014 earnings of $3.94 per share.

Previously, the company projected the percentage growth rate to be in the low double digits off a 2013 base excluding Time of $3.51.

TWX closed Tuesday's regular trading session at $64.74, down $0.51 on a volume of 5.95 million shares. In the past 52-week period, the stock has been trading in a range of $55.71 to $70.77.