'Kong', 'LEGO Batman' success drives Time Warner's profit beat

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[May 03, 2017]  (Reuters) - Time Warner Inc, which is being bought by AT&T, reported a better-than-expected quarterly profit, helped by the success of its movies "Kong: Skull Island" and "The LEGO Batman Movie" in the first quarter.

 A Time Warner logo is seen at a Time Warner store in New York City, October 23, 2016. REUTERS/Stephanie Keith/File Photo

Revenue from Warner Bros, which includes the movie business and is the company's biggest unit by revenue, rose 8.2 percent to $3.37 billion.

As of April 30, "Kong: Skull Island" had grossed more than $562 million globally, according to tracking firm Box Office Mojo.

"The LEGO Batman Movie" grossed more than $308 million globally, as of April 30, according to Box Office Mojo.

Revenue from Home Box Office (HBO), known for its hugely popular show "Game of Thrones", rose 4.1 percent to $1.57 billion.

The latest season of Game of Thrones is set to premiere in July this year.

Excluding items, the company earned $1.66 per share, beating the average analysts' estimate of $1.45 per share, according to Thomson Reuters I/B/E/S.

Like other media companies, Time Warner has also been struggling to keep its viewers hooked to its channels, at a time when most audience are flocking to online streaming services such as Netflix Inc <NFLX.O> and Amazon.com Inc's <AMZN.O> Prime.

This has resulted in shorter TV seasons and hurt writers' earnings, who are paid per episode. Hollywood writers and representatives of movie studios reached a tentative deal on Tuesday, averting a second strike in 10 years.

The company's net income increased to $1.42 billion, or $1.80 per share, in the first quarter ended March 31, from $1.21 billion, or $1.51 per share, a year earlier.

Revenue rose to $7.74 billion from $7.31 billion.

Time Warner said on Wednesday it was on track to close its merger with AT&T before the end of 2017. U.S. President Donald Trump has, during his election campaign, opposed the $85.4 billion deal.

Analysts on an average had expected revenue of $7.67 billion.

(Reporting by Rishika Sadam in Bengaluru; Editing by Savio D'Souza and Shounak Dasgupta)

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