Despite reporting a revenue drop of 6 percent to $7.1 billion in Q3, a profit drop of 38 percent and confirming a $100 million charge for Q4 due to the latest Time Inc. reorg, Time Warner (NYSE: TWX) said this quarter is going well enough for its Content group to raise its overall guidance for the year. (The Content group essentially is the company without AOL.) AOL, slated to be split off by end of this year, continued its river of woes with a big 23 percent drop compared to last year. That plus decreased revenue in Filmed Entertainment and Publishing overshadowed revenue gains in the Networks segment. Those details after the jump.
|2Q 2008||2Q 2009||Estimate|
– Publishing unit, which includes Time Inc: revenues dropped 18 percent ($204 million) to $914 million, due to declines of 22 percent ($129 million) in ad revenues and 13 percent ($49 million) in subscription revenues. Also, in Q409 outlook, the company confirmed it will take a $100 million charge as a result of Time Inc’s restructuring. The majority of layoffs will be done today.
– AOL unit revenues were down 23 percent ($235 million) to $777 million, resulting from a 29 percent decline ($138 million) in subscription revenues due to continued subscriber losses and an 18 percent decrease ($92 million) in ad revenues. The decline in ad revenues was due primarily to lower paid-search and display advertising on AOL Media, reduced sales of ads on third-party sites and the unfavorable impact of foreign exchange rates, it said. As of September 30, 2009, the AOL internet service had 5.4 million U.S. access subscribers, a decline of 438K from the prior quarter and 2.1 million from September 30, 2008.