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By Mike Caggeso
Jeffrey Bewkes won't even start his new post as chief executive of Time Warner Inc. (TWX) until Jan. 1, but he's ready to sell assets – and perhaps even AOL – as the media giant wrestles with a 53% drop in third-quarter profits.
"We will be looking at anything that improves our strategic advantage," Bewkes said during a conference call with analysts yesterday (Wednesday), Bloomberg News reported . "That'll be true for acquisitions and divestitures."
Interestingly, asset sales during the third quarter last year made this year's profit losses seem bigger than they actually are. Time Warner sold stakes in both Time Warner Telecom and Warner Bros.' Australian theme parks. It also received a $373 million tax benefit and wrote down $200 million in costs from the WB Network, which absorbed Viacom's UPN Network.
But Time Warner's excuses end there.
AOL lost 851,000 subscribers, causing profits to drop 24% to $295 million. And analysts are forecasting continued trouble for the Internet and media portal. AOL hopes its reported $340 million acquisition of online-advertiser Quigo Technologies Inc. will draw more revenue.
Time Warner is also the parent company for Time Warner Cable, HBO, New Line Cinema, Warner Bros. Entertainment, Time Inc. and Turner Broadcasting System (TNT, TBS, Cartoon Network, CNN and more).
Also interesting to note: CNNMoney's version of the story doesn't say a peep about declining profits, saying the firm's third-quarter earnings report contained "no major surprises." It also quoted an analyst who advised Time Warner shareholders not to sell their stocks.
News and Related Story Links:
- New York Times:
AOL's New Plan: It's Not Working
Time Warner preps for change