Time Warner Lowers Forecasts

NEW YORK, November 5:
Reporting flat revenues and an earnings dip for the third quarter, Time Warner
has also lowered its 2008 profit growth forecast, which it now expects to be up
5 percent to $12.9 billion, rather than the previously expected 7-percent to 9-percent
gain.

Announcing the
revised forecasts, Time Warner said that it had incurred $182 million in
restructuring charges for the first nine months of the year, largely as a
result of the reorganization at New Line. An additional $100 million to $126
million in restructuring costs, related to changes at Time Inc., are expected
in the fourth quarter.

For the third
quarter, meanwhile, the company reported flat revenues of $11.7 billion, while
net income was down slightly to $1.1 billion. Subscription revenues increased
to $6.5 billion, while advertising revenues were down to $2.1 billion, and
content revenues fell to $2.9 billion.

The company's cable
networks—Turner Broadcasting and HBO—fared well, with revenues up 7
percent to $2.7 billion, with 10-percent and 9-percent gains, respectively, in
subscription revenues and ad revenues, offsetting a 17-percent drop in content
revenues. Operating income was up 21 percent to $909 million.

Warner Bros.
Entertainment, citing difficult prior-year comparisons and lower TV licensing
fees, saw its revenues fall 9 percent to $2.9 billion, but operating income
gained 3 percent to $275 million.

Time Warner Cable
boosted its revenues by 8 percent to $4.3 billion, driven by a 9-percent hike
in subscription revenues to $4.1 billion, while ad revenues were relatively
flat at $224 million. Video revenues increased by 4 percent to $2.6 billion,
while high-speed data revenues posted a 12-percent rise to $1.1 billion and
voice revenues gained 37 percent to $421 million. Operating income at the
segment gained 16 percent to $788 million. As at the end of the quarter, the
platform had 34.2 million revenue generating units.

At AOL, revenues
fell 17 percent to $1 billion, with decreases in both subscription and ad
revenues, while operating income was down 9 percent to $268 million.

Time Inc.
experienced a 7-percent fall in revenues to $1.1 billion, with a 35-percent
plummet in operating income to $162 million.

—By Mansha
Daswani