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Shares of Time Warner
"As you saw in our outlook released [yesterday] morning, we remain fully on track to meet, if not exceed, our guidance for the full year," CEO Jeff Bewkes said in prepared remarks made during the quarterly call with analysts.
Have investors become so jaded that even good results are meaningless? So it would seem. Revenue rose 10.2% to $7.03 billion, while adjusted earnings rose to $0.60, up 10 cents from last year's second quarter. Analysts were calling for $0.56 a share on $6.82 billion in revenue, according to data compiled by Yahoo! Finance.
Most impressive, I think, is that these results came while Warner Bros. movies suffered a tough quarter at the box office, led by Green Lantern's underpowered performance. Filmed Entertainment saw operating income decline 11% despite a 13% increase in revenue.
TV networks made up the difference. Revenue from the segment that includes the alphabet soup known as TBS, TNT, CNN and HBO increased 9%, while operating profit improved 4%. Publishing revenue grew 3%, resulting in a 10% gain in earnings for the segment.
What's interesting to me as an investor is that Time Warner grew even as it spent big to improve its content library in key areas. Original programming and sports costs rose 16% during the quarter, yet if HBO proves anything it's that original content sells when done right. Time Warner is capitalizing on this truism with HBO Go, its mobile app that apes Netflix
Meanwhile, at 15 times earnings, the stock trades for less than direct peer Walt Disney
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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Time Warner and Walt Disney at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
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