Time Warner Inc., the world's largest media company, on Wednesday reported a fourth-quarter profit, reversing a year-earlier loss, led by strong film and cable television results.
The New York company, which is in the process of selling its music business, said fourth-quarter net profit was $638 million, or 14 cents per share, compared with a net loss of $44.91 billion, or $10.04 per share, a year earlier when it recorded a huge writedown on its America Online unit.
Quarterly revenue rose 6 percent to $10.9 billion, reflecting increases in all segments except America Online.
Time Warner cast the fourth quarter as a turning point as it shifted attention to its cable business and away from America Online, which remains a target in two federal investigations.
AOL had been the lynchpin of the much-ballyhooed merger of Time Warner Inc. and America Online in 2001, but it turned into a financial albatross.
"I think they've set the stage in a very positive fashion to now be judged on their fundamental performance as opposed to the historical nightmares relative to the merger and online division," said Jeffrey Logsdon, an analyst at Harris Nesbitt Gerard.
For the 2003 full year, Time Warner had a net profit of more than $2.6 billion, its first annual profit since the merger of Time Warner and America Online.
Fourth-quarter revenue at AOL declined 7 percent as the Internet service provider lost about 400,000 members in the quarter, and 2.2 million for the year.
Looking ahead, the company said it expects 2004 operating income, before charges, to grow at a percentage rate in the high-single to low-double digits, from $8.8 billion in 2003, on higher revenue and profit margins.
Earnings at all the operating units, except for filmed entertainment, are expected to rise. The film division faces difficult comparisons as it seeks to replace blockbuster franchises like "The Lord of the Rings" series.