Earnings: Time Warner 1Q Profit Drops 20 Percent; AOL Ad Revenue Grows 40 Percent

Despite a continued momentum from AOL ad sales, Time Warner (NYSE: TWX) reported 1Q earnings fell 20 percent to $1.2 billion, or 31 cents per share, from $1.5 billion, or 32 cents per share, a year earlier. Meanwhile, revenue was up 9 percent to $11.2 billion, which the company attributed to gains in its cable category. Overall:

— AOL revenues fell 25 percent, due to a 43 percent decrease in subscription revenues. These losses were offset by AOL’s 40 percent increase in ad revenue, which came in at $157 million in 1Q.
— AOL’s operating income rose from $265 million to $1.1 billion, which was largely attributed to the pretax gain of approximately $670 million on the sale of AOL