Time Warner reports $1 billion 2Q profit

NEW YORK - Time Warner Inc. swung to a $1 billion profit in the second quarter and released details Wednesday of a long-anticipated plan to offer many AOL services such as

e-mail for free.

The company said the revamp, which gets under way next month, wouldn't hurt earnings this year. That assurance relieved investors. AOL will slash marketing costs for its waning dial-up service even as subscribers continue to leave.

Any expectation that the turnaround would require a ''hit'' to AOL earnings ''is not right,'' Jeff Bewkes, Time Warner's chief operating officer, told analysts on a conference call.

The world's largest media company, which also owns HBO, CNN, Warner Bros. and Time Inc., earned 24 cents a share in the April-June period as gains in its cable TV and filmed entertainment units outweighed weakness at AOL and in publishing.

Time Warner lost $409 million in the same period a year ago, when the company recorded a $3 billion charge for settling securities litigation. The loss amounted to 9 cents per share a year ago.

Excluding one-time items, the media company earned 20 cents per share in the most recent period, a penny better than analysts polled by Thomson Financial expected. On a similar basis, the year-ago earnings were 16 cents per share. Revenues edged up 1 percent to $10.7 billion.

Time Warner's shares rebounded 42 cents, or 2.6 percent, to close at $16.67 on the New York Stock Exchange. However, they were still below the $17.13 level they closed at on July 5, the day before The Wall Street Journal first reported that the revamp was in the works.

The revamp at AOL is aimed at taking advantage of the boom in online advertising while reducing exposure to the rapidly dwindling business of providing Internet access over phone lines, which had once been AOL's mainstay.