Time-Warner (www.timewarner.com) announced a tentative settlement with a group of shareholders who claimed the company had put forth inflated revenue figures and had accounted improperly when it merged its operations with those of AOL in 2000. The company is setting aside $3 billion to settle shareholder lawsuits. It also authorized a program to buy back $5 billion of its shares over two years.
In the second quarter ending June 2005, Time Warner had a net loss of $321 million (7 cents a share) on revenues of $10.74 billion. In the year-ago period, it earned $777 million in profit (17 cents a share). Revenues dropped 1% from $10.86 in the second quarter of 2004. The AOL division saw a 4% decline in revenues but an 11% increase in profits.
Operating income (before depreciation and amortization) from Time-Warners entertainment division declined 47%, largely because it could not match the high revenues of the previous year, when the companys New Line division released the third LORD OF THE RINGS movie.