Time Warner recently posted a first quarter profit, rising a whopping 37% from the previous year. Shares when from 39 cents to 62 cents which might not be a lot to the average Joe, but it translated into a $400M profit. I bet that just got your attention. The company attributed its recent success to both the cable and magazine subscriptions. But let’s be honest, how many people do you know read magazines these days, let alone Time?
Time Warner’s profit can solely be attributed to its recent cable success. Cable operators were forced to pay a higher fee for channels like CNN and TNT over the past year. Combine that with sales growing 9% and subscriptions rising 7%, there was plenty of profit to be had. While these numbers are great, it should be known that more people are homeowners and that there are, in fact, more people period. So while the huge profit is great for Time Warner, it should be taken with a grain of salt like every other statistic.
The profit also was aided by movies like The Blind Side and Sherlock Holmes (or maybe just the former). Time Warner has smartly diversified areas in which they focus on. But this isn’t surprising since they have pretty smart people working in the finance department. I don’t think their profit should be celebrated too much. They still need to keep pressing on and developing new marketing strategies. That means to keep pace with the big providers like DISH and DirecTV. While the profit is promising, keep in mind that the company does diversity in a wide range of things. Their broad reach helps with name recognition.
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