Revenues Up, Profit Down at Time Warner

NEW YORK, August 6: Time
Warner increased its revenues by 5 percent to $11.6 billion in the second
quarter, but net profit was down 26 percent to $792 million.

Announcing the results,
Time Warner’s CEO, Jeff Bewkes, said: “I’m pleased by the overall performance
of our businesses so far this year, particularly in light of the challenging
economic environment, and that we’re on track to achieve our business outlook.
This resilience reflects the strength of our brands, our expertise and our
scale, which we think give us a sustained advantage in creating, packaging and
distributing the industry’s most compelling content—such as The Dark
Knight, Sex and the City and The Closer.”

He added: “As we continue
to reshape Time Warner, we’ll increasingly focus on our goal to create and
manage high-quality branded content, across multiple platforms around the
world, at the highest returns possible for our stockholders.”

Among the drivers for the
company was filmed entertainment, where revenues climbed 14 percent to $2.6
billion, led by home video revenues in the U.S. and international TV licensing
fees on theatrical product. Operating income in this segment gained 16 percent
to $94 million.

Cable was also a strong
performer, with revenues up 7 percent to $4.3 billion. Subscription revenues
grew to $4.1 billion, consisting of video revenues of $2.6 billion, high-speed
data revenues of $1 billion and voice revenues of $397 million. Advertising
revenues grew 3 percent to $233 million. Time Warner Cable’s operating income
was $738 million, up 4 percent from the year-ago period. The platform ended the
period with 14.7 million customer relationships, with a 19-percent triple-play
penetration.

In networks (Turner
Broadcasting and HBO), revenues were up 9 percent to $2.8 billion, with
subscription revenues up 10 percent and advertising revenues up 11 percent.
Content revenues, however, were down 11 percent. Operating income gained 18
percent to $749 million.

At AOL, meanwhile,
revenues fell by 16 percent to $1.1 billion, reflecting a 29-percent decrease
in subscription revenues, offset in part by a 2-percent rise in advertising
revenues. Operating income declined 36 percent to $230 million.

Revenues were also down in
the publishing segment, with a 6-percent fall to $1.2 billion, posting an
operating income of $218 million, a 15-percent decline.

—By Mansha Daswani