Time Warner profit rises with AOL ad revenue

Time Warner Wednesday reported net income of $1 billion for its second quarter, on the back of rising advertising revenue from its AOL division and growth in its cable TV operation.

The figure beat the $409 million loss from the same period a year earlier. Revenue came in at $10.7 billion, the company said, up 1% from the previous year.

AOL's revenue declined by 2% due to falling subscription revenue. But Time Warner said the reduction was offset by rising advertising revenues. Ad revenue rose 40%, or $129 million. Subscription revenue fell by 11%, or $188 million. The company said its rising ad revenues reflected growth in three categories: display, pay-for-performance and paid search.

Time Warner said it lost AOL subscribers and was affected by unfavorable foreign currency rates. Time Warner is seeking to sell its subscriber operations in Europe while retaining the overall AOL brand for a portal fueled by Time Warner content.

As of June 30, AOL reported 17.7 million U.S. subscribers, a decline of 976,000 from the prior quarter and 3.1 million fewer than from the same quarter a year before.

AOL subscriber losses were less in Europe, dropping 218,000 users from the previous quarter down to 5.6 million members. The new figure represents a decline of 571,000 subscribers from a year earlier.

Time Warner's revenue from its cable division rose 15% to $2.7 billion. The division includes high-speed data, digital phone and digital video services revenue. The company said the average subscription revenue per basic cable subscriber rose 14% to $91 per month, and the number of subscribers increased.

The IDG News Service is a Network World affiliate.