Time Warner Reports Q1 Profit Results

May 2, 2007  •  Post A Comment

Time Warner’s first quarter profits were slightly lower as gains in cable operations and AOL were offset by a decline at its filmed entertainment unit.
For the three months ended March 31, 2007, the world’s biggest media company reported net income of $1.2 billion, or 31 cents per share, down from $1.5 billion, or 32 cents a share, a year ago. Revenues rose 9 percent to $11.2 billion.
“Our first quarter results put the company firmly on track to meet all of our full-year financial objectives,” chairman and CEO Dick Parsons said in a statement Wednesday.
At AOL, revenues declined 25 percent, but adjusted operating income rose 27 percent to $542 million because of lower marketing expenses and 40 percent growth in ad sales.
Revenues at the networks group, which includes Turner Broadcasting and HBO, were flat, because of a 12 percent decline in advertising revenues. The ad drop was the result of the shutdown of the WB network. Ad sales were up 6 percent at Turner. Operating income was up 6 percent for the network group.
Time Warner Cable revenues rose 61 percent to $3.9 billion, partly due to acquired systems. Operating income was up 28 percent to $579 million.
The film group declined because the company released “Harry Potter and the Goblet of Fire” and “Wedding Crashers” on DVD the prior year.
Analyst Spencer Wang of Bear Stearns said Time Warner’s results were “modestly ahead of expectations.” He said the AOL transition from a subscriber model to an ad-supported business was moving along, called the cable performance solid and said that given the impact of the WB shutdown, Turner was solid as well.
“We believe that ratings weakness at the Turner entertainment properties was offset by strong performance at the news channels, with the latter more reliant on the scatter market,” Mr. Wang said in a report.

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