Time Warner earnings sink
The media giant is hurt by AOL, where third-quarter revenue was down 38%. It expects to post double-digit gains for 2008.
By Thomas S. Mulligan
Los Angeles Times Staff Writer
November 8, 2007
Time Warner Inc.'s AOL unit continues to struggle with its transition from an Internet-access service to a pure online advertising vehicle. Third-quarter revenue at AOL sank 38%, as subscription fees plunged and advertising income rose too weakly to make up for it, Time Warner reported today.
Overall, quarterly earnings for the world's biggest media company sank by 53% compared to a year-ago period that was fattened by one-time tax and investment gains and other items. Excluding those items, the company posted an earnings gain that was in line with the expectations of Wall Street analysts.
Time Warner, in a conference call with analysts and news media today, also said it expected double-digit earnings growth for full-year 2008.
In trading a little before noon Eastern time, Time Warner shares were up 2 cents to $18.35, while the broader stock market was down sharply.
A bright spot was the company's movie division, which saw a 33% revenue gain, boosted by the strong performance of the latest release in the Harry Potter film series, "Harry Potter and the Order of the Phoenix."
Time Warner owns the Warner Bros. studios, HBO, Time and People magazines and a fleet of cable-TV channels led by CNN. It reported earnings of $1.09 billion, or 29 cents a share, in the three months ended Sept. 30, as compared with $2.32 billion, or 57 cents a share, a year earlier. Setting aside one-time items, earnings were 26 cents a share in the current period, versus 19 cents a share a year ago.
Revenue was up 9%, to $11.68 billion from $10.75 billion.
On Monday, Time Warner announced the elevation of Jeffrey L. Bewkes to chief executive, effective Jan. 1, replacing Richard D. Parsons, who will remain chairman of the board.
Investors, upset with the conglomerate's poor stock performance--zero gains over the last five years--are clamoring for a shake-up, such as selling or spinning off AOL, Time Inc., the venerable magazine division, and majority-owned Time Warner Cable.