Time Warner Sees 5% 2Q Rise, Cable Upfront Solid

Time Warner reported 5% revenue growth for the second quarter Wednesday, partly due to what it said were strong results at its Turner cable group. Overall, however, company-wide ad dollars rose only 2%.

At Turner, ad dollars were up 11% (by $89 million), although Time Warner does not provide a total figure for the networks. Turner ad dollars are reported in a bundle along with other revenues that include subscription dollars for HBO and Turner itself. The HBO/Turner group pulled in a total of $2.8 billion in the second quarter--a 9% increase.

In regard to Turner, Time Warner CEO Jeff Bewkes said on a conference call to discuss the results: "We've long maintained that our entertainment networks are broadcast substitutes, and this position has increasingly resonated with advertisers."

The upfront for TBS, TNT and related properties posted, on average, double-digit volume increases--with CPMs up in the high single digits, he said. Bewkes said the same amount of inventory was sold this year as last summer. "These increases mark the top-end of the entire TV universe," Bewkes said. "That includes both broadcast and cable."



Unlike Viacom and others that have reported recent weakness in the scatter market, Bewkes gave no indication of a second-quarter slowdown at Turner, where he said the group is "performing, I think, relatively better than pretty much all of the competition."

Overall, Time Warner's 5% revenue jump yielded $11.6 billion. Operating income was up 1% to $1.9 billion.

Ad dollars--that span AOL, Turner, Time Inc. and other areas--rose 2% in the quarter from $2.27 billion last year to $2.31 billion.

At Time Inc., revenues declined 6% to $1.2 billion--with ad dollars down 9%. There was a $19 million rise in online revenues for the group's properties, such as People.com and CNNMoney.com. "Time Inc. felt the greatest impact from the difficult advertising environment," Bewkes said. There was "softness" in the pharmaceutical, auto, cosmetics and financial services categories, he said.

AOL ad dollars increased 2% ($8 million).

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