Time Warner Q2 results, Cable and AOL spin-offs

7 Aug 2008

New York-based media giant Time Warner’s second-quarter earnings fell 26% year-on-year as net income dropped to USD792 million from USD1.07 billion a year ago. Revenue increased 5% to USD11.6 billion as gains from the sale of assets bolstered earnings.

Internet arm AOL’s subscription revenue fell 29% pushing operating income down 36%. Dial-up subscribers fell 26%, leaving a total of 8.1 million. The service lost 604,000 customers during the quarter. Time Warner has already announced it will split AOL’s advertising and subscribership operations with the probable intention of selling one or both. Internet service provider (ISP) EarthLink has been named as a potential bidder for the dial-up access business, while Yahoo and Microsoft are rumoured to be interested in AOL’s web sites.

Time Warner previously announced it will sell the 84% of its cable operations that it still owns to shareholders later this year in a deal that will result in a USD9.25 billion Time Warner Cable dividend for the parent company. The cable unit continued to perform well in the quarter, reporting net income of USD277 million, up from USD272 million twelve months previously. Revenue rose 7.1% to USD4.3 billion. Total subscribers rose 2% in the quarter, to 33.6 million, while the number of customers taking bundled services rose 3%.

United States, Time Warner Cable (Spectrum)