More people watched CNN and Adult Swim during the summer months, helping to lift third-quarter revenue at Atlanta-based Turner Broadcasting System, the company’s parent, Time Warner Inc., reported Wednesday.
Revenue for the networks, which included HBO, rose 7 percent to $3.2 billion for the quarter, ending Sept. 30. Adjusted operating income dipped slightly to $1.1 billion, from $1.13 billion because of increased costs to produce original shows on Turner’s cable networks such as TNT and TBS. Higher sports programming costs also played into the decrease, the company said.
Time Warner Chief Financial Officer John Martin said he expects the operating income of Turner Broadcasting and HBO to double in the next couple of years based in part upon improved ratings at CNN, new program lineups on the other networks and money coming from sports programming deals.
TNT and TBS are built around a combination of syndicated shows, original programming and sports, including major league baseball and the NBA. Time Warner Chief Executive Officer Jeff Bewkes told analysts Wednesday that acquired programming such as "Big Bang Theory,” and comedies such as “Two and a Half Men” have become a critical part of a new lineup at TBS.
“Our syndication pipeline is building,” Bewkes said. “The Holy Grail of TV production is still a hit 30-minute comedy. They can run for multiple cycles and become multi-billion dollar entities.”
Executives warned analysts that Turner’s networks in the fourth quarter would lose advertising revenue built around the NBA because of the ongoing lockout. All games have been canceled through Nov. 30. That revenue loss will be offset by Turner not having to pay high programming costs to air the games, however.
Time Warner reported a net income of $822 million, or 78 cents a share, up from $522 million, or 46 cents a share during the same time a year ago. Earnings surpassed analyst expectations in large part because of the success of Warner Bros. “Harry Potter and the Deathly Hallows: Part 2,” which has made $1.3 billion in ticket sales since its July release.
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