Healthy TV Results Offset Weak AOL, Magazine Performance At Time Warner

Time Warner, one of the world's biggest media companies, reported solid third-quarter results this morning, despite the impact of a languishing general economy and eroding global advertising marketplace. The results come as Time Warner has been spinning off assets such as its cable operations to remake itself into a smaller but purely focused media content company.

While total revenues were essentially flat during the quarter at $11.7 billion, declines in its movie and magazine publishing businesses were offset by healthy gains in its TV operations. Online unit AOL continued to languish as part of a long-term transformation of its core business models.

AOL's revenues decreased 17% to $1.0 billion, due to a 26% decline in subscription revenues and a 6% decrease in advertising sales. The decline in subscription revenues is related primarily to AOL's strategy to offer its e-mail and other products free of charge to Internet consumers. Driving the decrease in advertising revenues were declines in display advertising on AOL Network sites and sales of advertising on third-party Internet sites, offset partially by an increase in paid-search advertising.



Magazine publishing revenues decreased 7% to $1.1 billion, due to declines of 8% in advertising sales, 18% in "other" revenues and 1% in subscription revenues. The decrease in advertising revenues reflected lower domestic print magazine revenues--offset in part by higher online revenues, led by, and

TV revenues climbed 7% to $2.7 billion, with growth of 10% in subscription revenues and 9% in advertising sales, offset partially by a 17% decline in content revenues. Subscription revenues benefited mainly from higher rates at both Turner and HBO--and to a lesser extent, more subscribers for Turner's networks, as well as the impact of international expansion.

Driving the increase in advertising revenues were Turner's domestic networks, reflecting largely higher CPMs (advertising rates per thousand viewers) and audience delivery, as well as Turner's international networks, reflecting primarily an increase in the number of units sold.

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