• by Paul Gough , January 29, 2004

Time Warner reported higher quarterly and full-year revenues Wednesday, with every unit except America Online increasing.

Revenues rose 6 percent to $10.9 billion in the fourth quarter and 6 percent to $39.6 billion in 2003, compared to the same periods in 2002. Time Warner, which dropped AOL from its name in the latter half of the year, reported a profit of $638 million in the fourth quarter compared to a loss of $44.91 billion because of a write down at AOL.

Time Warner Chairman Dick Parsons noted at the beginning of last year 2003 was going to be a "reset" year.

"I'm pleased to say that one year later, we're past that," Parsons said. "2004 is about driving the company forward."

Every ad-supported business units showed increases, with the exception of AOL. The networks division -- which includes Turner, TNT, The WB and ad-free premium channel HBO -- saw revenue rise 4 percent to $2.2 billion, which matched analysts' estimates. Advertising revenues in the quarter were $734 million, an increase of 3 percent compared to a year ago. Time Warner Cable revenues, on flat basic-cable subscriptions but growth in digital and high-speed services, were up 9 percent to $2 billion. Analysts had expected quarterly revenues of about $2.2 billion in the fourth quarter. Yet advertising revenues at Time Warner Cable dropped 29 percent to $131,000 in the fourth quarter because there was less advertising booked to promote new and existing channels as well as a sharp drop in intercompany advertising, from $53 million in 2002 to $6 million in 2003. Time Warner Cable's third-party advertising rose 8 percent in the quarter. The publishing unit's advertising revenues also fell, down 2 percent to $723 million in the quarter compared to the fourth-quarter 2002. The unit's full-year advertising revenues were up 2 percent to $2.45 billion compared to 2002.

Chief Financial Officer Wayne Pace said the networks were right in line with Time Warner's expectations although growth was a little less than normal because of higher programming and marketing costs at HBO and Turner. Turner ad revenues were up 8 percent, Pace said, while The WB's ad revenues were down 10 percent in the quarter because of lower ratings although there were higher rates. The WB's ad revenues are up 10 percent for the full year, Pace said, and there was double-digit growth for the full year at the Turner networks.