This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Time Warner to Split Up AOL

Updated from 9:01 a.m. EST

Media conglomerate Time Warner (TWX - Get Report) plans to separate its struggling AOL unit's Internet access business from its Web portal and online advertising components, CEO Jeff Bewkes said Wednesday.

Bewkes announced the plans in a conference call to discuss the company's fourth-quarter and full-year financial results, which were roughly in line with Wall Street's expectations, as strong gains in cable television offset sliding revenue at AOL.

The CEO also suggested the company may reduce its stake in Time Warner Cable. Shares were recently rising 4.5% to $16.09.

Time Warner earned 28 cents a share in the fourth quarter, vs. 43 cents a share in the year-ago period, but those results were impacted by one-time items that decreased the current quarter's results by a penny a share and increased last year's quarter by 21 cents a share. Fourth-quarter revenue gained 2% to $12.64 billion.

Analysts polled by Thomson Financial expected a profit of 29 cents a share on revenue of $12.65 billion.

For the full-year, the company posted diluted income per share of $1.08, vs. $1.20 a share in the year-ago period. One-time items bumped up results by 12 cents a share and 40 cents a share, respectively. Revenue jumped 6% to $46.5 billion.

Analysts expected a profit of 96 cents a share on revenue of $46.46 billion.

Time Warner managed the revenue gains, despite a steep slide in subscription revenue at AOL. For the year, AOL's revenue slid to $5.18 billion, vs. $7.79 billion in 2006. The results were due to a 52% slide in subscription revenue, though advertising revenue gained 18%. The company last year sold its Internet access business in the U.K., Germany and France, contributing to the decline, and saw domestic revenue decrease as it offered email and other products to consumers for free.

Those losses, however, were offset by strong growth in cable television revenue, which grew to $15.96 billion, from $11.77 billion in 2006.

"I'm pleased that our company met or exceeded all of our financial objectives last year," CEO Jeff Bewkes said in a company statement. "Looking ahead, we've identified key initiatives that will enable us to deliver strong business results long into the future while increasing our returns to our shareholders."

Additionally, Time Warner said it expects to report full-year diluted earnings per share of between $1.07 and $1.11. Analysts expect a profit of $1.11 a share.
This article was written by a staff member of

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TWX $72.32 1.30%
AAPL $110.21 -0.99%
FB $92.00 -0.86%
GOOG $638.64 -1.10%
TSLA $233.11 -3.50%


Chart of I:DJI
DOW 16,852.26 +62.07 0.37%
S&P 500 1,993.23 +13.31 0.67%
NASDAQ 4,782.5220 +34.1610 0.72%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs