(Reuters) - Time Warner Inc reported quarterly profit and revenue above analysts’ expectations, boosted by higher advertising and subscription revenue at its Turner division and Home Box Office network.
Revenue at Turner, which owns channels such as CNN, TNT and Cartoon Network as well as NCAA.Com, rose 4.5 percent in the quarter, helped by the NCAA Division I men’s basketball tournament and growth in Turner’s news businesses.
Advertising revenue at Turner grew 4 percent, while subscription revenue rose 3 percent.
Evercore ISI analyst Vijay Jayant said the advertising growth at Turner was better than expected.
Revenue at HBO, whose popular shows include hit medieval fantasy series “Game of Thrones”, increased 4.4 percent.
HBO’s standalone streaming service, HBO Now, was launched on Apple Inc’s devices this month, in time for the fifth season premiere of “Game of Thrones”, reaching millions of viewers who do not subscribe to pay TV.
“The initial response (to HBO Now) has been very positive both in terms of subscribers and usage,” Chief Executive Jeff Bewkes said on a post-earnings call.
Time Warner said the “Game of Thrones” premiere was watched by a total of 18.1 million people in its first two weeks, over 1 million more than the viewership for the prior season’s first episode.
Turner and HBO together account for more than half of Time Warner’s total revenue.
Revenue in the company’s Warner Bros. Studio business rose 4.3 percent, helped mainly by higher licensing revenue from subscription video-on-demand sale of “Friends” and the box-office success of Clint Eastwood’s war film “American Sniper”.
The company’s net income, however, fell to $970 million, or $1.15 per share, in the quarter ended March 31, from $1.29 billion, or $1.42 per share, a year earlier.
Net income was hurt due to an increase in marketing costs primarily related to the launch of HBO NOW and higher spending on original programing.
Excluding items, the company earned $1.19 per share from continuing operations.
Revenue rose to $7.13 billion from $6.80 billion.
Analysts on average had expected earnings of $1.09 per share and revenue of $7.0 billion.
Shares of Time Warner, which rose 2 percent before the opening bell, were little changed in afternoon trading.
(This story has been refiled to add dropped word “than” in fourth paragraph)
Additional reporting by Lehar Maan in Bengaluru; Editing by Saumyadeb Chakrabarty