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Time Warner's earnings fall

Time Warner Inc. on Wednesday reported a 53 percent decline in net income for the third quarter versus the same period a year ago, when results were boosted by tax and investment gains.
/ Source: The Associated Press

Time Warner Inc. on Wednesday reported a 53 percent decline in net income for the third quarter versus the same period a year ago, when results were boosted by tax and investment gains.

Gains in the company's cable TV and movie studio business, which was boosted by "Harry Potter and the Order of the Phoenix," outweighed a decline in earnings at AOL, which continued to lose subscribers as it shifts toward an online advertising model.

The media conglomerate, which owns HBO, Warner Bros., Time Warner Cable and Time magazine, earned $1.09 billion or 29 cents per share in the three months ending in September versus $2.32 billion or 57 cents per share in the same period a year ago.

Revenues rose 9 percent to $11.68 billion from $10.75 billion.

On Monday the company announced the long-anticipated appointment of Jeff Bewkes, currently the chief operating officer, as CEO effective Jan. 1, succeeding Dick Parsons, who is staying on as chairman.

The year-ago figures included gains from the sale of an Australian theme park business and other assets as well as tax-related benefits.

Excluding those one-time items and discontinued operations in both periods, the company earned 24 cents per share in the last quarter, in line with the estimates of analysts surveyed by Thomson Financial, versus 19 cents per share a year ago.

Adjusted operating income before depreciation and amortization, a measure of profitability, rose 15 percent to $3.2 billion.

The largest gain came from Time Warner Cable, which posted 28 percent higher profits as it absorbed new subscribers from bankrupt Adelphia Communications Corp. and also signed up more customers for premium services including digital phone and high-speed Internet.

Earnings from movie production, which are often volatile because of hits and misses at the box office, jumped 71 percent on the latest "Harry Potter" movie as well as "Rush Hour 3" and "Oceans 13."

AOL, meanwhile, lost another 851,000 subscribers, ending the quarter with 10.1 million U.S. Internet access customers as it revamps its business plan toward selling advertising instead of providing online access.

Also Wednesday AOL said it was acquiring Quigo, an online advertising company, for an undisclosed amount.

Time Warner maintained its full-year earnings expectations of $1.07 per share, including 12 cents per diluted share related to after-tax gains, such as the sale of AOL's Internet access business in Germany.