Time Warner, Sprint Nextel post losses but top forecasts

Time Warner Incorporated's second-quarter earnings fell 26 percent on declining subscriber fees at its AOL online unit and lower ad revenue at the Time publishing business, the company said Wednesday.

The New York-based media conglomerate affirmed its full-year financial targets after revenue rose at its film, cable and networks segments.

Time Warner also took legal and tax steps that make it possible to split its AOL online business and sell it in parts.

The company said net income fell to $792 million, or 22 cents per share, from $1.07 billion, or 28 cents per share, a year ago.

Excluding one-time items, profit rose to 24 cents per share from 22 cents per share last year, when gains from the sale of assets bolstered earnings.

The adjusted result was a penny better than analyst expectations, according to Thomson First Call.

Revenue rose 5 percent to $11.6 billion, surpassing Wall Street's estimate of $11.46 billion.

But Sprint Nextel also said it expected customer losses to ramp back up next quarter and said it was selling $3 billion in convertible stock, partly to pay down debt.

The Overland Park, Kan.-based company reported that it lost $344 million, or 12 cents per share, during the quarter ending June 30.

By comparison, the company earned $19 million, or 1 cent per share, in the same period a year ago.

Not counting one-time items, Sprint Nextel said it would have earned 6 cents per share, beating the 3 cents per share expected, on average, by analysts surveyed by Thomson First Call.

The one-time items included $149 million in pretax charges for severance, exit costs and asset impairments and other minor costs tied to its 2005 purchase of Nextel Communications Inc.