AOL Time Warner returned a strong second quarter, supported by gains in its film and cable units.
The media conglomerate said revenues for the quarter grew 6 per cent to $10.8 billion over the same quarter last year. Net income came to $1.06 billion compared to $396 million for the year-ago period. Analysts polled by Thomson First Call had predicted earnings of $0.10 a share
Conglomerate chairman and CEO Richard Parsons said: "It's fair to say we delivered overall a solid quarter."
However, the company warned that the continued US Securities and Exchange Commission (SEC) investigation into its accounting practices had unearthed two transactions that were incorrect.
AOL Time Warner countered that it believes the transactions between the AOL unit and Bertelsmann are accurate, however.
The AOL unit reported a 6 per cent decrease in revenues for the second quarter due to dried-up advertising market. Subscription revenues grew 6 per cent, partly due to strong gains for AOL Europe.
AOL reported 25.3 million US members by the end of the quarter, a 1.2 million decrease from the same quarter last year. The Internet unit pinned much of the loss on the removal of non-paying members from its subscriber base.
AOL Europe members stood at 6.2 million at the end of the quarter, 238,000 more than in the year-ago period.
Parsons said that the company is betting on AOL's upcoming AOL 9.0 Optimized software to support the Internet division: "We've got our fingers crossed and we are quite optimistic (about AOL 9.0)," he said.
AOL Time Warner's filmed entertainment revenues spiked 16 per cent in the quarter, due to blockbusters like "The Matrix Reloaded," while revenues from cable subscriptions climbed 13 per cent.
The company is still being dogged by the SEC probe which began last year. Upon issuing its quarterly results it said that it may have to restate financial results related to the transactions in question. It already restated two years' worth of financial results last year due to accounting problems within the AOL unit.
Additionally, it said: "The SEC continues to investigate a range of transactions principally involving the company's America Online unit."
Looking ahead it said it expects revenue to grow in the mid-single digits for full-year 2003, compared to $41 billion in 2002, while revenue from the AOL unit will be down in the mid-single digits for the year, compared to $9.1 billion in 2002.