Time Warner (NYSE: TWX) handily beat revenue and earnings estimates for the first quarter of 2010, with a profit increase of nearly 10 percent boosted by the ad recovery, higher affiliate fees and a strong film slate. It’s a far cry from the same quarter last year, when the company met expectations with revenue and profit declines. It’s also another reminder of how much lighter Time Warner seems to feel without the AOL (NYSE: AOL) albatross around its neck, especially with Time Inc. turning in something positive to talk about — and to add to the bottom line.
True, revenue dropped 1 percent for Time Inc. to $799 million for Q1 but the Time Warner publishing division reported increases in advertising of 5 percent and subscription revenue of 2 percent. That only translates to $18 million and $5 million respectively but it’s a dramatic change from last year when advertising revenue dropped by $167 million to $383 million and subscriptions were down $58 million. The ad increases were attributed to higher domestic print magazine and online revenues. The subscription increase is more ephemeral, with a “modest” decline in subscription revs offset by better currency rates. That doesn’t make up for lost ground: in Q108, Time Inc, brought in $550 million in advertising revenue
Revenue rose 9 percent at Turner, to $3.0 billion. In the mix: ad revenue, up 9 percent; affiliate fees/subscription rev up 7 percent; and content, primarily program sales and licensing, up 22 percent. Turner has more spending coming after its high-profile deals with CBS (NYSE: CBS) to share NCAA’s March Madness and with Conan O’Brien for a late-night show. It also should have more reason (at least, more reason to think it can) to go for higher affiliate fees and a boost to advertising revenue.