Time Warner Profit Surges on Film, TV

Time Warner Inc. reported Wednesday that its first-quarter profit more than doubled thanks to a gain from the sale of its music division and stronger results in its film and television divisions.

The New York-based media giant also reported improved results and a slowdown in subscriber defections at its America Online unit, which is in the midst of a turnaround effort.

Time Warner reported a profit of $961 million, or 20 cents a share, up from $396 million, or 9 cents, a year earlier. Revenue rose 9% to $10.1 billion.

Excluding the effects of an accounting charge and discontinued operations, the earnings were equivalent to 15 cents a share, higher than the 9 cents a share that analysts surveyed by Thomson First Call had been expecting.

The 2004 first-quarter results include $215 million in income from discontinued businesses, mainly tax benefits related to the sale of the Warner Music Group last month for $2.6 billion.

AOL’s revenue edged slightly lower to $2.19 billion, but operating income rose 21% on lower costs and better results from its European operation.

AOL also reported that it lost 361,000 paying subscribers in the quarter, well below the 830,000 paying subscribers it lost in the fourth quarter of last year.

Time Warner’s Hollywood studios posted a 25% increase in revenue, led by higher licensing fees from television syndication including “Seinfeld.”

The company’s Warner Bros. and New Line studios had a combined 20% share of the U.S. box office in the first quarter, and New Line’s third installment in the “Lord of the Rings” trilogy became only the second movie to break the $1-billion mark at the box office.

Time Warner’s television networks unit posted a 5% rise in revenue, as subscription revenue rose 10% due to higher subscription rates at HBO and other networks.

The company cut its net debt to $18.8 billion, from $22.7 billion at the end of 2003, meeting its debt-reduction targets a year ahead of schedule.

The results were announced after the end of regular trading on the New York Stock Exchange, where Time Warner’s shares closed down 31 cents at $16.51.

In after-hours trading, the shares jumped 75 cents.