Media conglomerate Time Warner Inc. said Wednesday its first-quarter profit slipped 18 percent, but beat Wall Street expectations as growth in its cable segment helped lift revenue by 9 percent.
Net income slipped to $1.20 billion, or 31 cents per share, from $1.46 billion, or 32 cents per share, a year ago.
Excluding one-time gains, profit from continuing operations totaled 22 cents per share in the latest period, ahead of the 20 cents per share that analysts polled by Thomson Financial had been expecting and also above the 20 cents per share that the company earned on a comparable basis in the same period a year ago.
Revenue grew to $11.18 billion from $10.24 billion, led by growth in cable television.
Time Warner also raised its full-year profit outlook, saying it now expected to earn $1.05 per share, including 10 cents per share of gains from asset sales such as the sale of AOL’s Internet access business in Germany and some sales of cable systems. In January Time Warner said it expected to earn $1.00 per share in 2007.
AOL continued its transition from a subscription business to one focused on advertising, and reported a 27 percent gain in profit despite lower revenues as network expenses for marketing costs fell. AOL is now giving away many of its services such as e-mail for free in hopes of attracting more online traffic and ad dollars.
Revenues at AOL fell 25 percent on a 43 percent decreased in subscription revenues, offset partly be 40 percent growth in advertising. AOL had 12 million U.S. Internet access subscribers at the end of the quarter, down 1.2 million from the previous quarter and 6.6 million below the year-ago level.
Revenue from cable TV jumped 61 percent and profit rose 54 percent as the company added systems from Adelphia Communications. That business also benefited from signing up more customers for premium services such as digital video. Revenue at systems that Time Warner owned both before and after the addition of the Adelphia customers and other related transactions rose 12 percent.
In movies and television, profit fell 27 percent on a 1 percent decline in revenue, as lower revenue from home video more than offset higher earnings from TV shows overseas.
Earnings from television networks rose 6 percent on flat revenues due to the absence of losses from The WB network, which was shut down, and earnings from magazine publishing fell 28 percent on a 1 percent decline in revenues due to higher restructuring charges.
Time Warner said it expected to complete its $20 billion share repurchase program by the end of the second quarter.