Investors Wednesday morning were mildly punishing Time Warner (TWX) for missing estimates. The company reported revenue fell 9%, year over year, to $6.8 billion, less than the $6.97 billion analysts were expecting, while adjusted profit per share of 45 cents was comfortably ahead of the average 37 cents estimate.
The company reaffirmed its forecast for 2009 for adjusted earnings per share of $1.89, which is below the $1.99, indicating that some
For each of the company’s three business units — TV networks, Film studios, and print publications — the song was much the same as prior quarters, with Networks revenue rising year over year, film revenue continuing its sing-song progress, dipping this quarter after rising last quarter, and print revenue slipping drastically, down 22%. AOL, meantime, saw revenue slip 24%, to $804 million.
AOL lost half a million subscribers from Q1 and 2.3 million from the year-earlier period, to end the quarter with 5.8 million subscribers. That decline was less than the 570,000 drop in Q1, and the lowest quarterly decline since AOL went free back in 2006, the company said. Paid search revenue at AOL fell 17%.
This is Time Warner’s first earnings report since announcing on May 28 it would spin off AOL. On a conference call with management Wednesday, the company said it is “on track” to complete that move by the end of this year.
The company bought back $350 million of stock in the quarter, and was able to cut its debt to $10.2 billion from $20.7 billion thanks to a special cash dividend it received in the spin-off of Time-Warner Cable (TWC) back in March.