* Time Warner profit climbs 57 pct on cable, Harry Potter
* Comcast profit up 5 pct; adds 229,000 customers
* Advertising spending healthy in face of weak economy
* Comcast shares up 0.5 pct; Time Warner slips
By Paul Thomasch and Yinka Adegoke
Nov 2 Comcast Corp and Time Warner
Inc reported stronger quarterly results on Wednesday,
confirming that it pays to have a solid lineup of cable
networks -- at least while advertisers keep spending.
Against all odds, advertisers continue to scoop up
commercial time on television, and cable networks including
Time Warner's TNT and Comcast's USA have been major
beneficiaries. Subscription fees have only helped.
That point was driven home on Wednesday when Time Warner
reported revenue from its cable networks rose 7 percent.
Comcast, whose cable business is run through its majority
interest in NBC Universal, posted a 12 percent increase.
"Cable networks drive the profitability of NBC Universal
and they continue to perform well," said Comcast Chief
Executive Brian Roberts, who has staked his reputation on last
year's $30 billion deal for NBCU.
Comcast's cable network results stand out even more
compared with the performance of its flagship broadcast TV
network NBC, whose prime-time schedule has struggled for years.
Already NBC has canceled two shows it just rolled out for the
new TV season, "Playboy Club" and "Free Agents."
"The cable networks like USA are firing on all cylinders.
Unfortunately, the public face of NBC Universal is the
broadcast network, and that is just struggling," said Sanford
Bernstein analyst Craig Moffett.
At Time Warner, where CEO Jeff Bewkes wants to focus the
company squarely on creating content for TV, movies and
magazines, advertising sales climbed 6 percent.
It cited strong pricing at its Turner networks, home to
original shows such as "The Closer," the late-night talk show
host Conan O'Brien, news on CNN and sports including basketball
and auto racing.
Bewkes also continued to champion TV Everywhere, an
initiative to bring more TV shows online for paying cable
subscribers, especially those who subscribe to HBO and other
premium channels. HBO Go, the mobile version of the channel,
has reached so-called authentication deals with most major
carriers except Time Warner Cable Inc and Cablevision
Systems Corp to date.
"We have made a lot of progress with the two major
affiliates who don't yet have authentication agreements. I'm
hopeful for their sake they will be up and running in the next
few months," Bewkes said on a call with analysts.
Overall, Time Warner Inc's adjusted earnings rose a
better-than-expected 27 percent to 79 cents a share despite a
dip in adjusted operating profit at its cable networks. That
dip caused Time Warner Inc's shares to fall as much as 3.7
percent on Wednesday.
"Although we appreciate this concern, we view this as a
slight over-reaction given the 7 percent growth at the cable
networks and the strong, 18 percent overall adjusted operating
income growth," said Collins Stewart analyst Thomas Eagan.
Time Warner also raised its full-year outlook for earnings
per share growth to "high teens" percentage points from "at
least low teens".
Along with its cable business, the company got a big lift
from the latest installment of the Harry Potter movie series..
It is not just Comcast and Time Warner whose results are
enjoying the one-two punch of cable advertising and cable
subscription fees. Discovery Communications Inc , the
company behind hit cable TV shows "Storm Chasers" and
"Deadliest Catch," reported quarterly results late Tuesday that
surpassed Wall Street expectations.
Next up is News Corp , whose cable networks should
emerge from the long shadow cast by its troubled newspaper arm
when it reports earnings later on Wednesday. Walt Disney Co , with some of the best cable brands in the business,
including ESPN, reports next week.
Today's stubbornly bad jobs and housing markets -- coupled
with Europe's debt crisis -- would seem the sort of troubles
that would have advertisers once more slashing budgets.
Advertisers instead appear to be betting that the best way
to jump-start sales is to keep their brands in front of
consumers with billboards, digital campaigns and, particularly,
Heading into Wednesday, the economy was a major question
facing media companies, particularly Comcast. Not only does
Comcast rely on advertising from its TV networks, but its chief
business of selling broadband, video and telephone services
relies heavily on the housing market and consumer confidence.
Overall, it added 229,000 telephone, video and Internet
customers. That satisfied Wall Street and calmed worries that
arose last week when Time Warner Cable and Cablevision Systems
posted disappointing subscriber numbers.
Comcast reported third-quarter net income of $908 million,
or 33 cents a share, up from $867 million, or 31 cents a share,
in the period a year ago.
Shares of Comcast were up 0.5 percent at $23.08 on