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Time Warner returns to profit

Time Warner Inc, the world's largest media company, swung back to a profit in the fourth quarter of last year after reporting a US$44.9 billion loss in the same period a year ago because of write-downs at its AOL unit, the company reported Wednesday.

Time Warner earned US$638 million, or US$0.14 a share, in the three months ending last month. The year-ago loss was equivalent to US$10.04 per share. Excluding one-time items, adjusted earnings per share were US$0.15, even with the estimate of analysts surveyed by Thomson First Call.

Revenues rose 6 percent, more than some analysts had been expecting, to US$10.9 billion from US$10.25 billion a year earlier, led by gains in its movie unit and cable TV business.

The company, whose vast holdings include the Time Inc magazine family, HBO, CNN and AOL, said it expects earnings in each of its segments to grow faster this year than last year, except for New Line Cinema, which had a blockbuster year last year with the latest Lord of the Ring> movie.

Excluding the effects of write-downs and other one-time gains and losses, the company's operating income edged lower to US$2.39 billion from US$2.43 billion in the same quarter a year ago. All segments posted stronger results except AOL and Networks, which includes CNN, HBO and TNT.

AOL remained a weak spot, as revenues declined 7 percent in the quarter. Operating earnings swung back to a profit of US$301 million compared with a loss of US$33.14 billion a year ago due to the write-off.

AOL continued to lose subscribers in the quarter, but at a slower rate. Subscribers declined by a net 399,000, below the 688,000 it lost in the previous three-month period.

As of the end of last year, AOL had 24.3 million subscribers in the US, down 2.2 million for the year. AOL is struggling to hold on to members who use dial-up services in the face of competition from low-priced highspeed Internet service providers.

CEO Dick Parsons said the company was pleased with the results, particularly achieving its debt-reduction goals ahead of time.

"One year ago I said 2003 would be a reset year. I'm pleased to say that we're past that," Parsons told analysts on a conference call. "2004 is really about driving this company forward."
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