NEW YORK (AFP) - Time Warner's third-quarter profit dropped 7.8 percent from a year ago to 499 million dollars, the company said as it set aside 500 million dollars for possible settlements of accounting probes at its America Online units.
The world's largest media-entertainment company said its profit amounted to 11 cents a share, or 10 cents without one-time gains, compared with a Wall Street forecast of 14 cents a share.
Revenue in the quarter rose 4.9 percent to 9.97 billion dollars.
America Online's accounting practices continue to be investigated by the Securities and Exchange Commission and the Justice Department. They are probing how Time Warner accounted for 400 million dollars that Bertelsmann AG paid to America Online for advertising from 2001 to 2003.
AOL has endured seven straight quarters of customer losses, and sources close to the company said job cuts are expected.
"While we're continuing to work to resolve the government investigations, we're staying focused on moving the company forward, and this quarter's results demonstrate the broad-based strength of Time Warner's businesses," said chairman and chief executive Dick Parsons.
The company's AOL Internet unit reported a one percent increase in revenues to 2.1 billion dollars, thanks to a 44 percent jump in advertising sales that offset a three percent decline in subscription revenue.
The company's video and cable television operations saw a 10 percent revenue increase to 2.1 billion dollars.
In film, including the Warner Bros and New Line Cinema units, revenues grew one percent to 2.5 billion dollars.
Within the firm's television operations, which include Turner Broadcasting, HBO and The WB Network, revenues were up eight percent to 2.2 billion dollars.
11/03/2004 - 16:43 GMT - AFP