Like other media companies, Time Warner has benefited from a rebound in advertising sales. In a conference call with investors Wednesday morning, the chief executive, Jeffrey L. Bewkes, said that revenue for the company’s channels increased 18 percent, reaffirming the strength of its cable content. The company’s results were mostly in line with expectations.
Net income declined 10 percent, to $651 million, or 59 cents a share, in the quarter, from $725 million, or 62 cents a share, from in the period a year ago. Adjusted earnings, at 58 cents a share, were slightly above expectations.
Analysts said the decline was mostly because of higher costs associated with the rights to the N.C.A.A. basketball tournament, which Time Warner’s cable channels shared with CBS for the first time this year. Total programming costs for the network division — which includes TNT, TBS, CNN, and HBO — jumped 37 percent from the quarter a year ago.
Partly offsetting the costs, combined advertising revenue for the channels climbed 48 percent, helping the company achieve the overall 18 percent gain in revenue for the division. “Investment in must-see sports is really paying off,” Mr. Bewkes said, crediting the NCAA basketball telecasts on the TBS, TNT and truTV channels.
Revenue declined 3.3 percent at the company’s motion picture arm, Warner Brothers, where net income declined almost 50 percent because its film slate was healthier in the same period last year.
Michael Nathanson, an analyst for Nomura Securities, said the decline was a result of fewer home video releases in the quarter “and the lack of any major box-office hits with releases.”
On Wednesday, Time Warner said it had acquired Flixster, an online community for film buffs that recommends films and has a strong presence on mobile phones. The acquisition also includes Rotten Tomatoes, a Web site that compiles film reviews. Time Warner said that Rotten Tomatoes would remain independent.
The price of the acquisition was not disclosed. Time Warner is expected to leverage Flixster and its fan base as it introduces “Digital Everywhere,” a pay-once, play-anywhere approach to digital movie delivery.
Time Warner’s publishing arm, Time Inc., which remains much smaller than the television or film divisions, reported revenue that was effectively flat. Asked on the conference call if he intended to sell Time Inc. — a persistent question — Mr. Bewkes said no and reiterated the opportunity that he saw for magazines on tablet computers.
Time Inc. confirmed early this week that it had struck a deal with Apple to make the iPad versions of Time, Sports Illustrated and Fortune available free to existing subscribers of the magazines. Previously, only People magazine was available that way for authenticated subscribers.
In an outlook statement on Wednesday, Time Warner affirmed that it expected earnings growth in 2011 to be in “the low teens” in percentage growth.
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