DIS Walt Disney Co

Time Warner Inc. said first-quarter earnings climbed above Wall Street's expectations, buoyed by continued HBO gains and a pickup in its Turner segment.

The New York company, which owns the Warner Bros. film studio and cable channels HBO, CNN and TNT, has been facing cable-TV subscriber declines amid the rise of online streaming. In the latest threat to emerge, The Wall Street Journal reported this week that Hulu is developing a subscription service that would stream feeds of popular broadcast and cable TV channels, with a targeted launch date in the first quarter of 2017. Hulu is owned by Walt Disney Co. and 21st Century Fox.

Last year, Time Warner launched HBO Now, its stand-alone streaming service for the channel featuring popular shows such as Game of Thrones and True Detective. In the first quarter, the company's HBO segment continued to help drive results. Revenue in the segment rose 7.7% from a year earlier to $1.51 billion. Time Warner said the sixth season premiere of Game of Thrones lent a boost—viewership rose in double digits from the year-ago period.

Meanwhile, revenue in the Turner business rose 7.2%, accelerating from a 2.1% clip in the fourth quarter. Chief Executive Jeff Bewkes noted that Turner aired cable's first-ever NCAA Men's Division I Basketball Championship game, while election coverage brought more viewers to CNN. Gains in the Turner and HBO units offset a 2.8% sales decline at Warner Bros., amid a dearth of Blockbusters. The company attributed the decline partly to adverse exchange rates.

Over all, the company reported a profit of $1.21 billion, or $1.51 a share, up from $970 million, or $1.15 a year earlier. Excluding restructuring-related costs, a one-time gain and other items, earnings per share rose to $1.49 from $1.19.

Revenue edged 2.5% higher to $7.31 billion. Analysts projected $1.30 in adjusted earnings per share on $7.30 billion in revenue, according to Thomson Reuters.

Time Warner also backed its earnings outlook for the year.

Shares rose 1.5% in light premarket trading.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

May 04, 2016 07:55 ET (11:55 GMT)

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