Time Warner sales, earnings down
Time Warner reported on Wednesday lower sales and earnings for its third quarter, with a drop in revenue across virtually all segments, including AOL.
Sales for the quarter dropped 6 percent to $7.1 billion from $7.5 billion in the year-ago quarter. Earnings fell to $661 million, or 55 cents a share, compared with $1.1 billion a year ago. Adjusted earnings per share was 61 cents, compared with analyst expectations of 53 cents, according to Thomson Reuters.
Time Warner also increased its full-year earnings per share outlook to at least $2.05. Previously, Reuters reported, the company had said the full-year figure would be similar to last year's $1.98 a share.
The company saw growth in its Networks unit, which includes Turner Broadcasting and HBO, with revenue climbing 5 percent to $2.9 billion. But sales fell in all other segments.
Lower movie ticket sales brought down revenue by 4 percent in the Filmed Entertainment division, while a decline in magazine subscriptions cut revenue by 18 percent in the Publishing segment.
Results were also weak at struggling AOL. The number of subscribers fleeing the service increased, while ad revenue decreased, contributing to a 23 percent drop in quarterly sales.
Time Warner sales fall in the third quarter. The figures above are in millions of dollars.
(Credit: Time Warner)Back in May, Time Warner announced that it would jettison AOL by the end of the year, a goal that Time Warner CEO Jeff Bewkes reiterated Wednesday. AOL will spin off into a separate company led by former Google ad exec Tim Armstrong, who was appointed AOL's CEO in March.
The 2001 union between Time Warner and AOL never quite coalesced. AOL was supposed to be the high-tech jolt that would transform Time Warner. But almost from the start, AOL underperformed, running into financial setbacks less than a year after the merger.
As the Internet continued to take off, subscribers realized they didn't need AOL to hop onto the information superhighway. By the end of 2003, losses had mounted, many of the key players in the deal had left, and Time Warner had dropped AOL from its name.
Though Time Warner has been dragged down by most of its underperforming segments, especially its publishing division, the company is still hoping for a brighter future without AOL.
Lance Whitney wears a few different technology hats--journalist, Web developer, and software trainer. He's a contributing editor for Microsoft TechNet Magazine and writes for other computer publications and Web sites. You can follow Lance on Twitter at @lancewhit. Lance is a member of the CNET Blog Network, and he is not an employee of CNET. 
- by AnthonyNYC November 5, 2009 12:04 PM PST
- Funny how these huge corporations think they should be immune to the bad economy,
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(4 Comments)The global recession is being felt accross the board so why wouldn't Time Warner expect lower profits?
People's pay checks are lower, unemployment is up and so it is natural that people would spend less on luxuries like cable tv and movies. I am surprised profits aren't down more.
I cut my cable bill in half last quarter by eliminating unnecessary services.
I personally think TWC's automatic 5-6% yearly cost increase has priced them too high for average family to afford so they just cut it out and go with OTA broadcasts.