Optimism rises as Time Warner income falls

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Optimism rises as Time Warner income falls

Time Warner has shrugged off a steep decline in net income for the second quarter of 2004.

The company said asset sales, charges and $760m (£418m) from a settlement with Microsoft had inflated the figure a year ago.

Despite net income for the quarter sagging 27% to $777m, Time Warner still beat revenue and earnings-per-share expectations. Total revenue increased by 10% to $10.9bn

Internet division AOL also recorded a 2% rise in revenue.

"AOL has executed an impressive financial turnaround," Time Warner chairman and chief executive officer Richard Parsons said.

AOL's total advertising revenue increased by 23%, and the company has also bought online marketing company Advertising.com for $435m. Parsons predicted the acquisition would give AOL a larger share of the online advertising market.

However, AOL continued to bleed subscribers, losing a net 668,000 in the past 12 months. AOL expects to continue losing narrowband subscribers, but hopes to gain broadband and premium service subscribers, and revenue through the roll-out of new products.

Time Warner's cable division added a net 127,000 residential high-speed data subscribers in the quarter to give a total of 3.5 million users. There was an unspecified net decline in subscribers for its Road Runner high-speed internet service.

Parsons was enthusiastic about the results and highlighted the company's strong cash position, saying it could make acquisitions and invest for further growth. "We've got a hell of a lot of fire power," he said.

Scarlet Pruitt writes for IDG

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