NEW YORK (AP) - A stronger box office slate, a new deal with Netflix and a better TV advertising climate contributed to growth at Time Warner Inc. to start off 2012.
Although earnings fell 11 percent during the first three months of the year because of restructuring charges, adjusted income beat Wall Street's expectations on the strengths of the company's movie studio and TV network businesses.
Those gains offset weakness in the magazine division.
Time Warner said Wednesday that it had first-quarter net income of $583 million, compared with $653 million a year earlier. Both translated to 59 cents a share because the company now has fewer shares outstanding.
Excluding one-time factors, Time Warner had adjusted income of 67 cents a share, better than the 64 cents expected by analysts surveyed by FactSet. The charges primarily related to shutting down a TV network in India and selling a school-fundraising business called QSP.
The New York-based company's adjusted income a year ago was 58 cents.
Revenue grew 4 percent to $7 billion, ahead of expectations of $6.82 billion. It was $6.68 billion last year.
Time Warner's cable TV networks, which include CNN, TBS, TNT and HBO, saw revenue grow 3 percent to $3.6 billion. Besides strong ad rates, the company benefited from better timing of March Madness basketball games and higher fees collected from U.S. cable and satellite TV distributors to carry the channels.
That was offset partly by a decrease in content revenue. Last year's quarter got a boost from licensing HBO's "Sex and the City" to other cable outlets in the U.S.
The company said TNT suffered from an NBA lockout, which delayed the start of the pro basketball season. Although viewership has returned, the company hasn't been able to make as much money from NBA games this year, Chief Financial Officer John Martin said during a call with analysts.
The division also had higher expenses, including costs to carry the basketball tournament and acquire original shows. It also had $35 million in costs related to the cancellation of HBO's "Luck" after horses died during production.
At the Warner Bros. studio, strong ticket sales of "Sherlock Holmes: A Game of Shadows" and "Journey 2: The Mysterious Island" worldwide contributed to a 7 percent revenue increase to $2.8 billion.
The division also benefited from higher licensing revenue of TV shows and the availability of a CW television series on Netflix, but revenue from DVDs and other home entertainment sales fell.
Revenue at the Time Inc. magazine division fell 3 percent to $773 million. Advertising and subscription revenue both declined. Weak sales at newsstands worldwide were offset partly by higher sales of U.S. subscriptions.
Time Warner also reaffirmed its full-year outlook, saying adjusted net income will grow by a low double-digit percentage from last year's $2.89.
CEO Jeff Bewkes said Time Warner planned to seek higher fees from cable and satellite TV companies to carry its Turner channels, including TNT, Cartoon Network and truTV, when contracts are up for renewal over the next several years.
"We have a number of renewals set for next year and we will just about finish the process by the end of 2016," Bewkes said. "We believe strongly that many of our brands are substantially undervalued today."
Time Warner shares fell 63 cents, or 1.7 percent, to close at $37.29 Wednesday.