Time Warner DVD up amid falling Q2 earnings

Studio looks forward to good year-end including Dark Knight

By Susanne Ault -- Video Business, 8/6/2008

AUG. 6 | Despite rising DVD results from such releases as I Am Legend, The Bucket List and 10,000 B.C., Time Warner reported falling earnings in its second-quarter year.

Time Warner posted $792 million in net income for the three months ended June 30. Due primarily to sliding Time Warner AOL and publishing performances, that figure marks a 26% drop from the comparable period last year.

Total revenue rose 5% to $11.6 billion.

Filmed entertainment, including DVD, represented one of Time Warner’s most improved divisions, with operating income climbing 16% to $94 million.

Another DVD highlight was Fool’s Gold.

Company management believe this unit will keep up the momentum through the year, considering the record-breaking grosses of summer theatrical The Dark Knight.

A problem spot for Time Warner was AOL, whose operating income declined 36% to $230 million. Management blamed the weakening unit on AOL’s decision to offer its e-mail and other products free of charge.

Slipping advertising revenue cut into Time Warner’s publishing division, whose operating income fell 15% to $218 million.

Brighter areas were network TV, rising 18% to $749 million in operating income, and cable, lifting 4% to $738 million.

“I’m pleased by the overall performance of our businesses so far this year, particularly in light of the challenging economic environment and that we’re on track to achieve our business outlook,” Time Warner CEO Jeff Bewkes said. “This resilience reflects the strength of our brands, our expertise and our scale, which we think give us a sustained advantage in creating, packaging and distributing the industry’s more compelling content, such as The Dark Knight and Sex and the City.”

Sex and the City will be released on DVD and Blu-ray on Sept. 23. The Dark Knight is expected in the fourth quarter. (Click for upcoming releases by quarter.)