* All three shy of revenue expectations
* TV advertising seen as key to results
* Viacom, Comcast shares up; Time Warner off
By Jennifer Saba and Liana B. Baker
May 1 Some of the biggest U.S. media
conglomerates beat earnings expectations on Wednesday, though
Time Warner Inc, Viacom Inc and Comcast Corp all found their
television businesses under scrutiny in a tough advertising
Time Warner posted a profit that topped even the
most optimistic Wall Street estimate by 4 cents, and Comcast
and Viacom both beat expectations by one
But all three were just shy of revenue expectations. Even
though they operate a range of businesses outside of TV,
investors focused on ad performance because it is a key revenue
source for media companies.
"That advertising number is the first thing people look at
when they look at the earnings release," said Matthew Harrigan,
an analyst at Wunderlich Securities.
Viacom's stock got the strongest lift from its results, with
shares rising 3.7 percent to $66.33 in afternoon trading, after
touching a new multiyear high earlier in the session.
The company reported a 6 percent drop in revenue because of
a weak slate of movies from its studio Paramount Pictures, but
advertising revenue turned positive during the quarter.
Its cable network properties, including MTV and
Nickelodeon, posted a 2 percent rise in advertising revenue in
the United States.
Viacom has been struggling with a decline in TV ratings,
which are the currency for commercials. The children's network
Nickelodeon in particular was a drag.
"Viacom had ratings pressure for a long time, so it's
significant that they have turned the corner in terms of ad
growth, which is now positive instead of negative," said Brett
Harriss, an analyst with Gabelli & Co.
For Time Warner, on the other hand, first-quarter ad revenue
at cable properties including TNT and news channel CNN fell 1
UBS analyst John Janedis said in a note to clients he thinks
it had to do with weak ad rates and what he characterized as
Part of the decline had to do with the timing of the 2013
NCAA college basketball tournament, a huge TV draw that
partially slipped into a different quarter. But ratings also
fell, with Evercore Partners estimating a decline of 4 percent
for Time Warner's cable networks in the quarter.
The company said second-quarter ad revenue at its networks
will be up in the high single digits in percentage terms.
Time Warner shares fell 1.1 percent to $59.12, recouping
some of their earlier losses.
Comcast, which unlike the other two companies combines media
properties with a cable television system, benefited more from
cable than from its media unit.
The company lost more video customers than expected but
gained more Internet subscribers than estimated. On the other
hand, operating cash flow at NBC Universal was a negative $35
million, much worse than a year earlier.
Revenue at NBC also fell because the network did not have
the lucrative Super Bowl this year, TV's premiere advertising
Shares rose 1.7 percent to $41.99, giving back some of their