French AIDS movie hotly tipped for Cannes' top prize
CANNES, France, May 28 The winner of the Cannes Film Festival will be announced on Sunday, with a French movie about AIDS campaigners and two dark Russian dramas among the hottest tips.
Time Warner Inc expects advertising revenue at its cable unit to pick up in the fourth quarter after the media conglomerate reported a slide in ad sales at its networks which include TNT, TBS and CNN.
Time Warner, which also owns premium TV service HBO, magazines and a movie studio, reported better-than-expected profit in the third quarter, sending shares up as much as 4.8 percent on Wednesday.
Chief Financial Officer John Martin told analysts on a conference call that U.S. advertising revenue should rise in the "mid- to high-single digits" in the fourth quarter, thanks to better cable programming and National Basketball Association games drawing in viewers. Labor strife, which delayed the start of last year's basketball season, hurt Time Warner during the 2011 fourth quarter.
Time Warner's advertising revenue in the third quarter did not decline as much as analysts expected. It fell 1 percent, above Macquarie analyst Tim Nollen's estimates of a 3 percent decline. Still, "no one is ever going to pretend that's a good number," said Nollen, adding that he wants the company stop the decline in the fourth quarter.
"The advertising number wasn't good, so we have to hope there's some sense of stabilization and improvement going into next year," Nollen said in an interview.
Time Warner's competitors News Corp and Discovery Communications, which both reported a quarterly uptick in advertising revenue at their cable networks, said on Tuesday that ad revenue growth is expected to be even better this quarter.
While media companies this year benefited from ad spending on the Olympics, the U.S. elections and other events, the outlook for next year is still uncertain.
When Chief Executive Jeff Bewkes was asked whether Time Warner's networks could bid on additional sports rights, he mentioned the National Football League as a possibility.
"If an NFL package came up and I think they are considering how they want to handle that, just like the NCAA, we would consider it," he said, adding that a deal would need "to bring an economic advantage."
Time Warner's Turner networks have rights to National Basketball League games, Major League Baseball and National Collegiate Athletic Association basketball.
Time Warner logged a 4 percent revenue increase at its networks division, which includes TNT, TBS, HBO and CNN. The growth came mostly from subscription revenue from cable operators.
Nomura analyst Michael Nathanson said third-quarter advertising revenue suffered because of the Olympics, which lasted 17 days and helped rival Comcast Corp's NBC Universal score an additional $1.2 billion in quarterly revenue.
HBO gained domestic subscribers, Time Warner said, without providing figures. Lazard Capital Markets analyst Barton Crockett said HBO Go, the popular Internet streaming service for HBO customers, could be reviving subscriber growth.
Time Warner affirmed its full-year outlook, which calls for earnings growth, excluding special items, at a low double-digit percentage rate from $2.89 a share last year. Analysts have forecast $3.20.
Third-quarter net income at Time Warner rose to $838 million, or 86 cents a share, from $822 million, or 78 cents a share, a year earlier.
The results beat analysts' average estimate of 82 cents per share compiled by Thomson Reuters I/B/E/S.
Revenue fell 3 percent to $6.84 billion. Analysts were expecting $6.89 billion.
Revenue at the film and TV entertainment unit dropped 12 percent, or $400 million, from a year earlier, when the company released "Harry Potter and the Deathly Hallows: Part 2," the final installment in the fantasy series.
Revenue in the publishing unit, whose titles include Time and Sports Illustrated, declined 6 percent, or $51 million, as advertising sales and subscription revenue fell.
Time Warner shares were up 4.1 percent at $44.89 on Wednesday afternoon, off an earlier high at $45.18.
(Reporting by Liana B. Baker in New York; editing by Gerald E. McCormick, Lisa Von Ahn, David Gregorio and Matthew Lewis)
* Unannounced, Russia stages test flight of new passenger plane
* But Heathrow says expects BA flight delays and cancellations