Time Warner Inc, the world's largest media company, on Wednesday posted a better-than-expected quarterly profit on higher television networks revenue and its latest "Harry Potter" movie. Time Warner, whose accounting at its AOL Europe unit has been under investigation by federal regulators, also said it has begun an internal investigation of accounting there, which could result in a restatement of financial statements.
The New York-based owner of the Warner Bros studios, CNN and HBO posted a second-quarter net profit of $777 million, or 17 cents a share, compared with $1.06 billion, or 23 cents a share, in the year-earlier quarter.
The 2003 quarter included gains of 12 cents per share from the sale of Comedy Central cable channel and a settlement with Microsoft Corp.
It raised its full-year profit forecast for the overall company and for the America Online unit.
Time Warner said it has begun an internal investigation of how it accounted for its 2002 purchase of AOL Europe, which has been the target of an investigation by the US Securities and Exchange Commission. The SEC is also probing advertising transactions in the US online unit.
The company noted that while it previously has stood by its accounting for the AOL Europe transaction, its talks with the SEC could lead it to reconsider its views of its accounting.
AOL lost 668,000 subscribers in the second quarter, compared with the first quarter of 2004. The decline reflected a loss of 753,000 trial subscribers, partially offset by an increase in billed subscribers by 85,000.
Total revenue in the quarter rose 10 percent to $10.9 billion.