And Time Warner wanted to sell its cable business

Sometime last month, WSJ ran an article about Time Warner wanting to spin off their cable business (Time Warner Cable) as a separate company, and instead focus on the content part of the business. Terrible idea, and hopefully the management realized that after its own first quarterly earnings report.

Quick rundown.

Filmed entertainment, that falls under the purview of Jeff Bewkes, the heir apparent to Time Warner, saw revenues decline one percent to $2.743 billion, and saw earnings decline 27% to $332 million. With DVD sales going to hell, that division is going to get hurt even more.

Cable business (that includes broadband and digital voice) saw revenues increase 61% to $3.851 billion (vs 1Q 2006) and profits zoom 54% to $1.307 billion. Of the $3.851 billion in sales, $971 million came from (Adelphia) acquired systems, and another $212 million from consolidation of Kansas City Pool.

Another bastard child of the dysfunctional content conglomerate, AOL saw earnings go up 27% to $542 million, even if revenues declined 25% to $1.458 billion. (This can’t last – can it?)

Hey Carl, stop heckling Ed Zander. Try your luck again with Time Warner.

Key broadband stats:

  • Residential high-speed data subscriber net additions reached 356,000 in the first quarter taking the total to 7.0 million.
  • Digital Phone subscriber net additions were 234,000 in the first quarter taking the total to 2.1 million.

Disclosure: I write a column for Business 2.0, a magazine owned by Time Warner.