NEW YORK: Time Warner Inc, the world's largest media company, said second-quarter profit dropped 26% after a gain from the sale of a books business and tax benefits boosted earnings a year earlier.
Net income fell to US$792mil, or 22 cents a share, from US$1.07bil, or 28 cents, a year earlier, New York-based Time Warner said in a statement yesterday.
The AOL Internet unit, which is separating the shrinking Internet-access division from its advertising business, and declining revenue at Time Inc held back growth.
Time Warner Cable Inc, the second-largest US cable-television provider, and the TV networks division that houses TBS and CNN increased sales faster than the overall company.
“Time Warner is less exposed to advertising than some of its peers but it's still an important driver of the cable networks and AOL,” said Chris Marangi, a fund manager at Gamco Investors Inc. “Display advertising is definitely not immune.”
UBS AG analyst Michael Morris lowered his 2008 earnings projection to US$1.07 a share last month from US$1.09 because of the worsening profit outlook for AOL and the Time Inc publishing group.
He continues to recommend Time Warner shares on the prospects for improvement and the possible sale of AOL. – Bloomberg