TW, AOL, REALNETWORKS
COMPARE QUARTERS
Time Warner Inc. had some mixed messages for investors, reporting an increase in third-quarter total revenues to $6.87 billion from $6.72 billion in last year's 3Q, but a drop in net income, from $360 million to $85 million. The entertainment conglom got a boost in publishing and music sales, but its filmed entertainment results were lower than last year's, which benefited fromthe addition of "The Drew Carey Show" into syndication.
The news inspired Chairman/CEO Gerald Levin to do some spinning. "If you take out filmed entertainment, revenues are up 9% across the company," he explained. "It's that damn Drew Carey's fault."
Significantly, Warner Music Group EBITDA climbed 10%, with a cash-flow increase from $79 million to $87 million.
Despite the so-so news, TW stock gained $3.69, closing at $69.25.
It was all good, meanwhile, for TW merger partner AOL, whose first-quarter profits increased nearly 100%, from $181 million for 1QFY last year to $345 million. AOL also reported an increase in revenue from $1.48 billion to $1.98 billion. While awaiting US regulatory approval of its acquisition of TW, AOL has seen its stock slip. But after hitting a 52-week low of $37, shares bounced back to close at $46.91. AOL posted a net income of 14 cents a share, slightly exceeding Wall Street expectations.
Meanwhile, Internet media software manufacturer RealNetworks reported a third-quarter loss as company shares fell almost 53 percent. The company claimed the loss was due to a slowdown in spending from software and advertising clients. Revenue did rise from $67 million to nearly $35 million, however the company suffered a $30 million loss, compared to a $3 million profit last year. Still, RealNetworks is optimistic it will make up the loss next quarter with an expected increase in software sales. RealNetworks stock tumbled $6.81 closing at $14.88.
