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Settlement And Asset Sales Boost Profits At AOL Time Warner

The media conglomerate posted a 2Q profit of $1.06 billion, thanks in part to the sale of its stake in Comedy Central and a settlement with Microsoft.
NEW YORK (AP) -- AOL Time Warner's second-quarter profits jumped to $1.06 billion, thanks in part to the sale of its stake in Comedy Central and a settlement with Microsoft Corp., the company said Wednesday.

In the April-June period a year ago, the world's largest media company--whose vast holdings include CNN, Warner Bros., HBO and Time Inc. magazines--earned just $396 million.

On a per-share basis, earnings rose to 23 cents from 9 cents. Revenues rose 6 percent to $10.82 billion from $10.2 billion.

Chief executive Richard Parsons said the results "give us confidence that we can deliver on all of our 2003 financial objectives." He said the company would continue to focus on reducing its debt, which stood at $24.2 billion at the end of the quarter, compared with $26.3 billion as of March 31.

The company said the Securities and Exchange Commission is still investigating several of its transactions, mainly at AOL. The SEC has determined that its accounting of two transactions between AOL and Bertelsmann was not correct, the company said, adding that it stands by its accounting. The SEC has not yet taken any action on the matter.

The profits included several one-time factors, including the company's sale of its 50 percent stake in the Comedy Central cable channel to Viacom. They also included a gain of $760 million related to an AOL settlement with Microsoft over Internet browsers.

Before the effects of those gains and other one-time factors, operating income fell 15 percent to $1.29 billion from $1.52 billion, due partly to higher levels of amortization and depreciation. Without depreciation and amortization, operating income rose 6 percent.

Income without the one-time effects was 12 cents per share, the company said, ahead of the 10 cents per share expected by analysts polled by Thomson First Call.

For the first six months of the year, AOL Time Warner earned $1.46 billion, or 32 cents a share, compared with a net loss of $53.85 billion, or $12.12 a share, in the same period a year ago, when the company took a $54 billion accounting charge to reflect the declining value of its assets.

Six-month revenues rose 6 percent to $20.82 billion, compared with $19.61 billion.