Time Warner reported lower first-quarter earnings because of big losses at AOL, but said profits were up at what it called its “Content Group.” Net income was $661 million or 55 cents a share, down from $771 million or 64 cents a share a year ago. Revenues fell to $6.9 billion from $7.5 billion. Time Warner reported its earnings separately from Time Warner Cable, which has been spun off into a separate company. Profits fell at Time Warner Cable because of expenses due to the separation and programming costs that rose 8%. At Time Warner’s networks unit, which includes Turner Broadcasting and HBO, operating income before depreciation and amortization rose 11% to $1.1 billion because of increased revenue and lower news gathering costs, he company said. Programming expenses increased 2% to $925 million. Revenues were up 6% to $2.8 billion, with a 9% gain in subscription revenues offset by a 2% drop in ad revenues. The company said ad revenues were down slightly at its domestic entertainment networks. Time Warner CEO Jeff Bewkes said the economy environment remains challenging and is affecting advertising revenues, particularly at AOL and its publishing businesses. “With our separation of Time Warner Cable, Time Warner has become a more content-focused company,” Mr. Bewkes said in a statement. “We’re also working to determine the right ownership structure for AOL.” Time Warner reaffirmed its earnings outlook for the year.

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Posted Wed, Apr 29 2009 9:58 AM by News