Media giants Time Warner, News Corp report strong earnings, beat estimates

For News Corp, the fiscal third quarter (Q3) net income was down 69 percent at $839 million, or 32 cents a share, compared with $2.73 billion, or $1.04 a share, for the same period a year ago, which included $2.4 billion in one-time gains and tax benefits on its partial sale of technology company NDS Group.

Revenue grew 19 percent to $8.78 billion from $7.37 billion for the quarter ended March 31.

On average, analysts polled by Thomson Reuters expected the company to earn profit of 23 cents on revenue of $8.2 billion.

Time Warner said the strong performance was due to rebound in advertising sales at its cable networks and magazines, as well as strong DVD sales.

Strong cost-cutting initiative, part of which included spinning off its AOL and Time Warner Cable divisions, also benefited the company.

The results, it said, were also helped by higher fees that cable operators pay Time Warner to carry cable channels such as CNN and TNT. Sales grew 9 percent on a 7 percent rise in cable subscriptions and a 9 percent rise in advertising sales. Operating income at the networks division rose 28 percent to $1.2 billion from $936 million, or an adjusted 22 percent to $1.14 billion from $936 million. Revenue advanced 9.6 percent to $2.96 billion from $2.7 billion.

Revenue increased 2 percent at Warner Bros, the filmed entertainment unit, mainly due to DVD sales of best picture Oscar nominee "The Blind Side" and "Sherlock Holmes" and the theatrical release of "Valentine's Day." In filmed entertainment, operating income rose 43 percent to $307 million from $214 million on a reported and adjusted basis. Revenue edged 2.3 percent higher to $2.69 billion from $2.63 billion.

Time Inc, the largest U.S. magazine publisher, also reported a 5 percent improvement in ad sales and 2 percent increase in revenue from subscriptions despite overall sales slipping 1 percent. In publishing, operating income on a reported and adjusted basis, surged to $50 million from operating loss of $32 million a year earlier. Revenue slipped to $799 million from $806 million.

"Time Warner is off to a great start in 2010, delivering record financial results for our first quarter," said Jeff Bewkes, Time Warner's chief executive, in a statement. "The advertising recovery benefited both Turner and Time Inc."