| MUMBAI:
Hurt by the soft advertising and DVD markets, Time Warner's net income has dropped
34 per cent for the quarter ended 30 June 2009.
The
online division AOL, the magazine business and filmed entertainment segments struggled,
pulling down the net income to $519 million.
In
the quarter, revenue declined by nine per cent from the same period in 2008 to
$6.8 billion.
Adjusted
Operating Income before Depreciation and Amortization decreased by two per cent
to $1.6 billion, as declines at the Publishing and AOL segments more than offset
growth at the Networks and Filmed Entertainment segments. Operating Income was
down two per cent to $1.2 billion.
For
the Content Group (which consists of the Networks, Filmed Entertainment, Publishing
and Corporate segments), revenue decreased by six per cent, while Adjusted OIBDA
and Operating Income both rose by four per cent.
Time
Warner chairman, CEO Jeff Bewkes said, “I’m encouraged by our operating
results for this quarter and the first half of the year. Despite the difficult
economy, our Content Group delivered four per cent year-over-
year Adjusted
OIBDA growth in the quarter. We’ve also reaffirmed our business outlook for
the full year. Our performance reflects the diversity of our revenue streams,
the appeal of our content and our continued focus on efficiency." The
reshaping of Time Warner that was started last year will continue. "We’re
on track to spin off AOL to our stockholders around the end of the year. Separating
AOL
will benefit both companies – enabling Time Warner to concentrate
fully on our core content businesses and improving AOL’s operational and
strategic flexibility,” said Bewkes. At
its networks division which consists of Turner Broadcasting and HBO, revenues
rose by five per cent to $3 billion, with eight per cent growth in subscription
revenues. This was offset partially by a three per cent decrease in advertising
revenues. Subscription revenues benefited primarily from higher rates at Turner
and HBO, as well as the impact of the consolidation of HBO Latin America Group.
This
was partially offset by the unfavorable impact of foreign exchange rates. Ad revenues
declined as a result of weakened demand, mainly at Turner’s international
networks
and the unfavourable impact of foreign exchange rates. Revenues
from the film business declined by nine per cent to $2.3 billion, as a stronger
theatrical release slate, driven by The Hangover, was more than offset
by lower DVD sales due to reduced quantity and performance of new home video releases,
lower catalogue shipments and lower television licence fees from theatrical product.
Also
contributing to the decline was a difficult comparison to the Lego: Indiana Jones
video game release in the prior-year quarter and the unfavourable impact of foreign
exchange rates.
AOL revenues decreased by 24 per cent to $804 million, as a result of a 27 per
cent decline in subscription revenues due to continued subscriber losses and 21
per cent lower ad revenues. The decrease in ad revenues was attributable to lower
display advertising and paidsearch advertising on AOL Media, as well as decreased
sales of advertising on third-party Internet sites. | 
