AOL drags down buoyant Time Warner
Published: 28 Jan 2004 16:25 GMT
Time Warner reported positive fourth-quarter earnings Wednesday despite poor performance from the company's America Online business unit.
The media giant, which is in the process of selling off its music operations, posted net income of $638m (£350m), or 14 cents per share, for the period that ended 31 December. That compares with a loss of $44.9bn, or a loss of $10.04 per share, for the fourth quarter of 2002.
The earnings fell just short of market analysts' average estimate of 15 cents per share, as reported by Thomson First Call. Excluding write-downs related to asset sales, the media giant's net income would have reached 15 cents per share.
Time Warner reported fourth-quarter revenue of $10.9bn, an increase of 6 percent over revenue of $10.25bn for the same period last year. The growth was driven by gains across all of the company's business units, except for AOL.
The company's struggling AOL Internet service, whose name Time Warner dropped from its moniker during the quarter, recorded a 7 percent drop in revenue for the fourth quarter amid continuing subscriber defections. AOL reported a US subscriber base of 24.3 million at the end of 2003, indicating a loss of nearly 400,000 users during the fourth quarter, and a reduction of roughly 2.2 million over the course of the year.
However, the company's Time Warner Cable unit reported positive growth for the quarter in its residential broadband ISP business, adding 182,000 new customers since the end of September.
For the full year, Time Warner had revenue of $39.6bn, a 6 percent gain over its 2002 sales, and a net profit of $2.6bn, the company's first annual profit since it merged with AOL in 2001.
The company also provided its 2004 business outlook Wednesday, saying that this year it expects higher annual growth rates in operating income, before depreciation and amortisation, than it reported for 2003, except in its filmed entertainment division. Time Warner said that operating income is expected to grow in the high single to low double digits from $8.8bn last year. The company reaffirmed that it expects operating income growth in the low double digits at AOL, compared with $1.5bn in 2003.
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