Time Warner's revenue up, though "Luck" wasn't

Wed May 2, 2012 3:40pm EDT

The entrance to the Time Warner Center is seen at Columbus Circle in New York August 4, 2010. REUTERS/Shannon Stapleton

The entrance to the Time Warner Center is seen at Columbus Circle in New York August 4, 2010.

Credit: Reuters/Shannon Stapleton

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(Reuters) - Time Warner said Wednesday its revenue rose 4 percent from a year ago, but impairment charges including $35 million for the canceled HBO series "Luck", kept the media company from recording a higher profit in the first quarter.

First-quarter revenue from the company's TV and cable networks, which include TNT, CNN and HBO, rose 3 percent to $2.6 billion.

Analysts had expected the company to take a charge related to the HBO show "Luck," which focused on the world of horse racing and gambling starring Dustin Hoffman. It was canceled when a third horse died during production for a second season.

Adjusted for impairment charges, including a $52 million charge for shutting down a network in India, the company reported EPS of 67 cents.

The company's film division, which includes the Warner Brothers studio, saw its revenue rise 7 percent, lifted by the movie "Sherlock Holmes: A Game of Shadows," which grossed about $535 million at the box office.

Gabelli & Co analyst Brett Harriss said the performance was weaker than expected. Subscription revenues increased 5 percent and advertising revenues rose 6 percent, below Harriss's estimates.

He said Time Warner, which owns a host of cable networks, premium TV services, magazines and a movie studio, reported a solid quarter but it was not as good as media peer CBS Corp's results which were released Tuesday.

CBS posted a better quarter than had been expected, driven by healthy advertising growth and increases in carriage fees at its cable and broadcast networks.

Net income for Time Warner amounted to $581 million, or 59 cents a share, compared with $681 million, or 59 cents a share, a year before. Time Warner bought back about 24 million shares from January 1 through April 27.

This came in 3 cents above Wall Street analysts' average estimates.

At its publishing unit, which owns "People," "Sports Illustrated" and "Time" magazines, revenue fell 3 percent to $773 million on declining advertising and subscription sales.

Total revenue for the company rose 4.4 percent to $6.98 billion. Analysts were expecting revenue of $6.8 billion.

(Reporting By Liana B. Baker; Editing by Gerald E. McCormick and Maureen Bavdek)

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