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AOL TIME WARNER BACK IN BLACK
First-Quarter Profit Beats Expectations,
but Music Lags
AOL Time Warner reported early today that it posted a profit of $396 million, or 9 cents a share, for the first three months of 2003.

The results beat analyst expectations of 4 cents per share, and reversed Q1 2002’s horrifying loss of $54.24 billion, or $12.25 per share due to huge goodwill write-downs.

Revenue for this year’s first quarter was $10 billion, up 6.3 percent over the same period last year. EBITDA rose 14% to $2.0 billion, helped by strong showings in the company’s Filmed Entertainment, Networks and Cable divisions, as well as a decline in restructuring charges from $107 million a year ago to $24 million this quarter. Operating Income rose 9% to $1.2 billion.

AOLTW’s net debt at the end of the quarter was $26.3 billion, compared to $25.8 billion at the end of 2002. During the quarter, the company sold its stake in GM Hughes for about $800 million. Yesterday, said it would sell its half of Comedy Central to Viacom (already owner of the other half) for $1.23 billion.

Warner Music Group reported revenue of $914 million for the quarter, compared to $947 million a year ago, representing a decrease of three percent. EBITDA sank four percent to $87 million, compared to $91 million a year ago. The unit reported an operating loss of $14 million for the quarter, compared to operating income of $20 million in Q1 ’02.

The company attributed the music revenue dip “mainly to declines in recorded music shipments related to the ongoing weakness in the worldwide music industry, partially offset by improved performances in DVD manufacturing and favorable currency translation.”

Top sellers for the quarter included Kid Rock, Red Hot Chili Peppers, Josh Groban, Missy Elliott and Phil Collins. Expect Linkin Park and Madonna to top that list when the company reports its Q2 results in three months.

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