Profits Down at Time Warner

November 4, 2009 World Screen

NEW YORK: Time Warner’s revenues for the third quarter were $7.1 billion, a 6-percent reduction on the year-ago period, while net profit fell 38 percent to $661 million.

“Time Warner is firmly on track to post solid results this year in spite of the tough economic environment," said Jeff Bewkes, the chairman and CEO of the company. "Driven by the better-than-expected performance at our Content Group this quarter, we’re raising our 2009 business outlook. We still expect to spin-off AOL by the end of the year, and we’re making great progress on our other longer-term strategic priorities. At the same time, we’re investing even more in our businesses and increasing our direct returns to stockholders this year, while significantly strengthening our balance sheet. I’m confident that the new content-focused Time Warner will be well positioned to deliver steady and attractive stockholder returns in 2010 and beyond.”

At the Networks division—encompassing Turner Broadcasting and HBO—revenues were up by 5 percent to $2.9 billion, with a 9-percent growth in subscription revenues partially offsetting the 12-percent decline in content revenues and a 1-percent decrease in advertising revenues. The subscription revenues benefited primarily consolidation of HBO Latin America Group, plus higher rates at both Turner and HBO. Content revenues were down as a result of lower ancillary sales of HBO’s original programming. The Networks division recorded an operating income of $938 million, a 3-percent increase.

At the Filmed Entertainment segment, meanwhile, revenues were down by 4 percent to $2.8 billion as a result of lower intake from home video and interactive games, as well as foreign exchange rates. Theatrical revenues were also down as compared with the year-ago period, when the studio released the worldwide hit The Dark Knight. Operating income, however, gained 6 percent to $291 million.

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AOL’s revenues dropped 23 percent to $777 million, with a 50-percent decrease in operating income to $134 million.