Time Warner Q3 Profits Falls 38%, Raises View

DOW JONES NEWSWIRES

Time Warner Inc. (TWX) third-quarter earnings fell 38% on particular weakness in publishing.

But the media giant topped analysts' expectations and raised its full-year earnings target to at least $2.05 a share, compared with a view initially given in April of about $1.98.

The media industry is making a difficult shift to take advantage of digital media while the global recession hampers its traditional revenue streams: advertising and consumer spending. But Tuesday, the chief executive at rival Viacom Inc. (VIA) noted demand was up and pricing was strong for television advertising heading into the holiday season, adding to an optimistic chorus from media executives.

With its eyes on being the top content provider across technologies, Time Warner has been shuffling its broad portfolio of media properties, including the spinoff of its cable business earlier this year and the planned spinoff of Web media unit AOL.

The company still expects to spin off AOL as a separate, publicly traded company by end of this year.

Time Warner posted a profit of $661 million, or 55 cents a share, down from $1.07 billion, or 89 cents a share. Earnings from continuing operations excluding items such as write-downs fell to 61 cents from 65 cents.

Revenue decreased 5.9% to $7.14 billion.

Analysts surveyed by Thomson Reuters predicted earnings of 53 cents on revenue of $7.08 billion.

AOL revenue fell 23% as advertising sales slid 18%. U.S. dial-up subscribership was down 438,000 from the second quarter, putting the figure at 5.4 million.

Time Warner's television business, which includes Turner Broadcasting and HBO, posted 3.2% growth in earnings as revenue climbed 5.2% with about a 1% decline in ad revenue. Movie earnings rose 5.8% while revenue was down about 4%.

Meanwhile, the publishing group saw a 40% decline in earnings and a 18% drop in sales. That segment has long been the topic of rumor of its future, including a potential sale. But Time Warner has repeatedly expressed its commitment to the business.

Shares in Time Warner closed at $30.16 Tuesday and weren't active premarket. The stock, which has nearly doubled from a low in March, is up up 35% for 2009.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com

(END) Dow Jones Newswires

11-04-09 0646ET