Time Warner reported profit of $661 million in the first quarter, down from $771 million from the previous year. The company reiterated its intention to find a new ownership structure for AOL, with a spin-off one likely option. AOL, an early pioneer in new media, is not viewed as fulfilling its potential inside Time Warner which separated from its cable operation earlier this year.
AOL saw a 23% drop in overall revenue to $867 million and a 20% drop in ad revenue, though AOL's business units also sell ads on third party Websites.
The New York headquartered company saw its most precipitous ad sales decline at publishing unit Time Inc., where sales were off some 30%. The company's cable programming networks which are dominated by the Turner Broadcasting stable also started to feel the effects of the recession, reporting a 2% decline in advertising sales. Revenue at the cable unit grew 6% to $2.8 billion with subscription revenue up 9%. Operating income was up 10% to $960 million.
The filmed entertainment unit also saw revenue fall 7% to $2.6 billion, a result of lower DVD sales. Time Warner had fewer releases in the quarter than the prior year.
Total revenue for the first quarter at Time Warner was $6.9 billion while operating income was $1.1 billion.
Chief executive, Jeff Bewkes, said in a statement, "With our separation of Time Warner Cable, Time Warner has become a more content-focused company. We're also working to determine the right ownership structure for AOL."