MUMBAI: US media conglomerate Time Warner has reported financial results for its third quarter ended 30 September, 2006.
In the quarter, revenues rose by seven per cent over the same period in 2005 to $10.9 billion, led by growth at the cable and networks segments. Adjusted operating income before depreciation and amortisation climbed 16 per cent to $2.9 billion, reflecting double-digit increases at the cable and AOL segments as well as gains at the networks and publishing segments. This growth was offset partly by a decline at the Film segment. Operating income was up one per cent to $1.7 billion.
Time Warner chairman and CEO Dick Parsons said, “Time Warner continues to build momentum and deliver value for our shareholders. This quarter’s results position the Company to meet all of our full-year financial objectives. We’re particularly encouraged by AOL’s early progress in making the transition to an advertising-supported business.
” Just as importantly, Time Warner Cable is generating outstanding results, even while successfully integrating its newly acquired cable systems. In addition, our capital allocation efforts continue to drive incremental value – including our $20 billion share repurchase programme as well as this year’s more than $20 billion of acquisitions and almost $4 billion of announced or completed non-core asset divestitures.”
Revenues at AOL fell by three per cent ($58 million) to $2.0 billion, due to a 13 per cent decrease ($210 million) in subscription revenues, offset in part by a 46 per cent increase ($151 million) in ad revenues. The decline in subscription revenues was due primarily to a decrease in domestic AOL brand subscribers, which reflects in part AOL’s previously announced plan to offer its e-mail, certain software and other products free of charge to broadband users in the
US ad revenues reflected strong growth in sales of advertising run on third-party websites generated by Advertising.com, as well as display and paid-search advertising. At the network segment (Turner Broadcasting, HBO and The WB Network) revenues rose by four per cent ($100 million) to $2.5 billion, reflecting higher subscription and ad revenues, including the consolidation of Court TV ($60 million), offset partially by lower Content revenues.
Subscription revenues climbed nine per cent ($125 million), due to higher rates and, to a lesser extent, increased subscribers at Turner and HBO as well as the consolidation of Court TV ($17 million). Ad revenues were up by six per cent ($42 million), led by 16 per cent growth at Turner, including Court TV ($42 million), offset partly by a 36 per cent decrease ($48 million) at The WB Network, which ceased operations on September 17, 2006.
The 23 per cent decline in content revenues ($72 million) is related to a decrease at HBO, due mainly to a difficult comparison to the prior year quarter, which included higher syndication sales of Sex and the City. For the quarter, Cartoon Network posted gains among kids 6-11 in both prime-time and total-day delivery compared to the prior year period.
Revenues from films fell by 10 per cent ($260 million) to $2.4 billion, due to difficult comparisons to the prior year period. The current quarter included revenues from Superman Returns while overall theatrical revenue declined from the prior year quarter, which included results from Charlie and the Chocolate Factory, Batman Begins and Wedding Crashers.
The company also reaffirmed its 2006 full year business outlook. It continues to expect that its 2006 full-year growth rate will be in the low-double digits.
