Company revenue rose 9.2% to $11.18 billion; net income totaled $1.2 billion, down from $1.5 billion in the first quarter of 2006.
Company 'on track'
"Our first-quarter results put the company firmly on track to meet all of our full-year financial objectives," Chairman-CEO Richard D. Parsons said in a statement accompanying the results. Double-digit profit growth at AOL and Time Warner Cable led the company's performance, he said, citing the boost in ad revenue at AOL and continued demand for bundled phone, internet and cable services at the cable unit.
"We remain committed to delivering superior returns to our shareholders by driving execution, generating industry-leading operating and financial results, and allocating our capital effectively," Mr. Parsons added, echoing the goals of Carl Ichan, the dissident shareholder who pushed the conglomerate to break up last year. "In addition to targeting resources to key growth areas of our businesses, our $20 billion share repurchase program -- which recently surpassed one billion shares of our common stock bought to date -- continues to be an attractive investment at current price levels."
Print ad revenue down
But it wasn't all wine and roses for Time Warner, whose other properties include Time Inc., Warner Bros. Entertainment, New Line Cinema, HBO and Turner Broadcasting. Time Inc., for example, saw revenue fall 1% to $1 billion as higher ad revenue was overcome by falling subscription and other revenue. Underneath that "higher ad revenue," though, the company said online advertising revenue rose while print magazine advertising revenue fell. That's not good news for the country's largest print magazine publisher.
Filmed-entertainment revenue also slipped 1%, if largely because of the tough comparisons from the first quarter a year earlier. This year's first quarter included "Happy Feet," "The Departed" and "Blood Diamond"; last year the quarter saw "Wedding Crashers" and "Harry Potter and the Goblet of Fire."
AOL's necessary transition
AOL continued its wrenching but necessary transition to a free service, watching revenue fall 25% to $1.5 billion on a 43% drop in subscription revenue but with a 40% increase in ad revenue.
Revenue at the cable networks -- HBO and Turner -- were flat at $2.4 billion as subscription and content revenue rose but ad revenue declined.