NEW YORK Time Warner today disclosed a 14.3 percent decline in first-quarter profit, as the media conglomerate’s AOL and publishing divisions continued to weather a deteriorating advertising market.
For the three-month period ended March 31, Time Warner reported net income of $661 million, or 55 cents per share, down from the year-ago result of $771 million, or 64 cents per share.
AOL and Time Inc. suffered the most precipitous declines, as both units saw revenue drop 23 percent. AOL’s total sales fell to $867 million, down from $1.13 billion, subscription revenues dropped 27 percent ($146 million) and advertising dollars were off $109 million, or 20 percent, to $443 million.
In a 10-Q filing with the Securities and Exchange Commission, the media giant said it “currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner’s stockholders, in one or a series of transactions.” The filing went on to note that a spin-off would be contingent on a number of factors, including “future market conditions or the availability of more favorable strategic opportunities that may arise.”
Publishing revenue fell to $806 million, down from $1.05 billion in the prior-year period. Time Inc. ad revenues declined by $167 million, or 30 percent, to $383 million, while subscription revenues fell 16 percent to $307 million.
The powerhouse networks division, which includes the Turner Broadcasting cable nets and HBO, boosted revenue 5.6 percent to $2.81 billion. A 9 percent lift in subscription revenue offset a 2.2 percent drop in ad sales. The networks brought in $723 million in ad sales dollars on the quarter, down from $739 million one year ago.
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