Time Warner makes 2003 gains, despite AOL drag

Box office success and increased cable rollouts helped boost Time Warner’s full-year and fourth-quarter 2003 results, despite continuing losses in the company’s AOL Internet division.

The New York media conglomerate said Wednesday that fourth quarter revenue was up 6% to $10.9 billion, compared to revenue of $10.2 billion for the year ago quarter.

Net income for the quarter ended Dec. 31, 2003 was $638 million, compared to $44.9 billion for the year-earlier quarter, which was largely affected by a $44 billion non-cash charge, Time Warner said.

Income per share for the quarter landed at 14 cents, just shy of the 15 cents per share figure predicted by analysts polled by Thomson First Call.

Operating income for the quarter came in at $1.5 billion, compared to a loss of $42.4 billion for the year-ago quarter.

Time Warner reported an increase in all segments during the quarter, except for AOL, which saw its quarterly revenue decline 7%, from $2.32 billion in 2002 to $2.16 billion in the fourth quarter of 2003.

Dogged with mounting competition from low-cost rivals and questions surrounding its past accounting methods, AOL has posted revenue and customer losses over the past few quarters. At Dec. 31, 2003 AOL had 24.3 million members in the U.S., 2.2 million fewer than it did the previous year, Time Warner said. In Europe, the service ended the year with nearly 6.4 million members, essentially flat from the year-ago figure.

The company’s filmed entertainment division reported a 17% increase in revenue for the quarter, however, boosted by money-makers like the latest Lord of the Rings movie. The cable division also helped boost results, reporting a 9% increase in the quarter thanks to continued deployments of high-speed data services.

Filmed entertainment and cable also led Time Warner’s full-year 2003 revenue gain of 6% year-over-year to $39.6 billion.

Operating income for the full year, before depreciation and amortization and including charges, rose to $8.5 billion compared to a loss of $35.8 billion in 2002. The 2002 income results were also affected by the $44 billion charge, Time Warner said.

The results released Wednesday present the company’s music business as a discontinued operation, given the recent sale of Time Warner’s DVD and CD manufacturing and distribution business, and the pending sale of Warner Music Group’s recorded music and music publishing business.