AOL Time Warner Reports Q3 Earnings Up 20% To $2.5 Billion
Global media giant AOL Time Warner defied the current advertising malaise by reporting a Q3 earnings increase of 20%. AOL Time Warner CEO Jerry Levin once again (see AOL Confident That Adspend Slowdown Has Arrested) cited diversity of interests as the reason why his company had managed such a healthy performance in such poor conditions.
America Online: Revenues at America Online grew 13% to $2.2 billion when compared with the same period last year, subscription revenue grew by 14% to reach $1.4 billion. Advertising and commerce revenue at America Online grew by 5% to $624 million.
Cable: Time Warner Cable revenues increased by 17% to $1.8 billion. Subscription revenue grew by 15% to $1.6 billion and advertising and commerce revenue rose 41% to $175 million. This was due in part to advertising sold in conjunction with the launch of new channels.
Filmed Entertainment: Revenues rose by 5% in this division to $2.1 billion thanks to films such as Rush Hour 2 and Cats & Dogs, also to the increasing popularity of DVD and resultant sales.
Networks: Turner cable network and HBO enjoyed a revenue increase of 4% to $1.7 billion as losses in advertising were offset by subscription revenue growth. CNN continues to lead in the ratings as does CNN.com which saw a 141% increase in traffic last month.
Music: Warner Music Group saw a revenue fall of 1% although the group has increased its US market share to 17.2%.
Publishing: The purchase of IPC Media (see AOL Takes IPC Media For £1.15bn), completion of which was also announced today, boosted Time Inc’s portfolio of magazines considerable and EBITDA for this division rose by 41% to $196 million in Q3.
Commenting on the results Levin said: “September 11th forever changed our lives and made the ties that hold us together as local, national and global communities more visible and vital than ever before. This new world has dramatically underscored the significance of our Company’s mission to connect and inform people and has made abundantly clear our commitment and responsibility to serve the public interest. We are particularly proud of our operations at CNN, Time Inc., AOL and NY1 News for their important work at this critical time for our nation.”
“The keys to our success in this difficult environment are clear. AOL Time Warner greatly benefits from the diversity of our revenue streams and the quality of our assets, built on a strong strategic and financial foundation. This quarter’s financial performance underscores the continuing power of our subscription businesses, as well as our excellent performance in Filmed Entertainment and continuing focus on controlling costs across the board. With AOL Time Warner businesses ranking at or near the top of every category, our unique mix of media properties ensures we are well positioned for future growth.”
“We have much to look forward to in the fourth quarter and beyond. This week, America Online launched its new version, AOL 7.0, which will extend the service’s subscriber growth momentum. The worldwide premieres of Harry Potter and the Sorcerer’s Stone next month and The Lord of the Rings in December will lead our strongest-ever quarter for Filmed Entertainment. We are continuing to develop next-generation services like AOL High Speed, multiple ISPs on Time Warner Cable systems and video-on-demand to drive new revenue streams. And we will advance our online music strategy with the fourth quarter launch of the MusicNet subscription digital music offering.”