• by Wayne Friedman , February 7, 2008

Time Warner's big gain from selling AOL's European online access business last year made it tough to show profitable growth in its fourth-quarter financial period.

As a result, net income dropped 41% to $1.03 billion. Adjusting for that one-time gain, the company's profits climbed 17%--mostly from strong results from cable TV and its movie division.

Cable TV climbed 19% to $1.6 billion during the period and 36% to $5.7 billion for the full year. Time Warner pointed to continued good performances from TNT, which it says was the No. 1 ad-supported cable network in total day delivery among adults 18-49 and 25-54 for the fifth year in a row. Strong programming here includes "The Closer" and "Saving Grace."

Time Warner Cable--which is partially spun off from the company--looks to be restructured, according to Jeff Bewkes, Time Warner's president and CEO, with Time Warner having less ownership of the stock.

T-W's film entertainment soared 46% to $350 million during the period and 8% to $11.6 billion for the entire year. Good theatrical performances and home video releases from Warner Bros.' "Harry Potter and the Order of the Phoenix," "300", "Ocean's Thirteen," "I Am Legend" and New Line Cinema's "Hairspray" and "Rush Hour 3" were the reasons.

Strong syndication/cable financial results also came from "Two and a Half Men" and "Cold Case," which were newly offered in the marketplace.

The company's publishing division had more modest results, gaining 2% in net income to $414 million for the quarter and 4% to $1.1 billion for the year. Advertising revenues were roughly unchanged year to year.

Higher online revenues ($93 million) from People.com and CNNMoney.com offset decreases in print magazine revenues, which included the closings of Life and Teen People magazines.

Regarding its much-maligned AOL division--something Wall Street analysts had hoped would be sold by now--the company is now looking to spin off its entire Internet access division. T-W had already sold its Internet access European operations a year ago.

AOL dropped 32% in its quarterly revenues to $1.3 billion. For the entire year, AOL's revenues skidded 34% to $5.18 billion, against $7.79 billion in 2006.