February 6, 2008 / 11:07 AM / 12 years ago

Time Warner sets lower 2008 profit growth target

People walk in front of the Time Warner Inc. headquarters building at Columbus Circle in New York October 13, 2005. REUTERS/Nicholas Roberts

NEW YORK (Reuters) - Time Warner Inc TWX.N forecast on Wednesday profit growth to slow but possibly exceed analyst estimates in 2008 after reporting quarterly earnings that reflected increases in broadband and phone subscribers and sales of “Harry Potter” and “300” home videos.

The media conglomerate, which owns AOL, CNN and Time Inc, said it expected adjusted operating income before depreciation and amortization to rise 7 percent to 9 percent this year, which could exceed Wall Street’s forecast of 7 percent growth.

This compares with growth of 17 percent in 2007.

Time Warner said fourth-quarter profit fell to $1 billion, or 28 cents per share, from $1.8 billion, or 44 cents per share, a year earlier when it logged a big gain from sales of AOL units and other items. Excluding the benefit, the year-ago profit was 22 cents a share.

Revenue rose 2 percent to $12.64 billion, matching the analysts’ average forecast, according to Reuters Estimates.

Newly appointed Chief Executive Jeffrey Bewkes is widely expected to speak about a plan to spin off the company’s ownership of Time Warner Cable TWC.N and potential plans to sell or spin off AOL.

AOL’s revenue fell 32 percent, dragged down by a loss of 740,000 subscribers and offsetting a 13 percent rise in film division revenue.

Adjusted operating profit at AOL rose 29 percent, while online advertising growth, a closely watched barometer of progress for the division’s restructuring, rose 10 percent.

Reporting by Kenneth Li; Editing by Lisa Von Ahn

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