Find and compare SEO and SEM software and advisors to expand your search engine presence and visibility.
Welcome Guest | Sign In

Time Warner Q1 Profit Beats Street

By Tim Gray E-Commerce Times ECT News Network
May 2, 2007 2:35 PM PT

Time Warner has reported first-quarter profits that outperformed Wall Street expectations, mostly on the strength of its rise in new cable, Internet and phone subscribers, as well as strong online ad sales.

Time Warner Q1 Profit Beats Street

Shares of the world's largest media company rose more than 3 percent as it reported a 40 percent increase in AOL advertising.

Although earnings fell to US$1.2 billion, or 31 cents per share, from $1.5 billion, or 32 cents per share, a year earlier, those numbers included a gain of 6 cents per share from a string of asset and investment sales.

The New York-based company reported sales of $11.2 billion -- in line with analysts' forecasts and up 9 percent from a year earlier.

Ad growth at AOL this year is likely to be at or above U.S. industry rates, but probably below 40 percent, according to Time Warner.

Internet Ad Sales Hot

The company's strategy of building its share of the fast-growing Internet advertising market while letting income from subscriptions rise has been successful, said Bruce McGregor, senior analyst with Current Analysis.

"The results benefited from double-digit percentage profit increases at the AOL and cable services divisions," McGregor told the E-Commerce Times. "They are still building the services out."

The cable business was the main driver of the higher revenues, up 61 percent.

Weaker Divisions

As expected, strength in Time Warner's cable operations was offset by weakness in its film division, where revenue fell 1 percent to $2.7 billion.

Time Warner's movie studios, including Warner Brothers, faced tough competition last year. Movie division revenue failed to beat year-earlier sales boosted by "Harry Potter" and "Wedding Crashers" DVDs.

Other divisions were also flat, according to Time Warner. The company's publishing unit revenue fell 1 percent, and operating income declined 49 percent because of higher restructuring costs.

Giving It Away

Last summer, AOL began offering its services for free to attract eyeballs as well as online ad dollars.

So far, says McGregor, the strategy seems to be paying off.

Facebook Twitter LinkedIn Google+ RSS
How do you feel about accidents that occur when self-driving vehicles are being tested?
Self-driving vehicles should be banned -- one death is one too many.
Autonomous vehicles could save thousands of lives -- the tests should continue.
Companies with bad safety records should have to stop testing.
Accidents happen -- we should investigate and learn from them.
The tests are pointless -- most people will never trust software and sensors.
Most injuries and fatalities in self-driving auto tests are due to human error.