Time Warner (NYSE: TWX) reported results in line with expectations this morning: revenue declined 7 percent to $6.9 billion, operating income declined 9 percent to $1.2 billion, and earnings per share from continuing operations was $0.46.  As expected, advertising-reliant Time Inc. and AOL drove much of the declines, while cable-oriented Turner and HBO buoying the results with single-digit revenue gains.  Here are the highlights:

—AOL: Revenue declined 23 percent during the quarter—subscription revenue declined 27 percent and ad revenue declined 20 percent—while operating income declined 47 percent. Most were expecting ad revenue declines about 20 percent so there were no big surprises here, but the company did not indicate how display, third-party sites, and search performed individually, which we’ll be listening for on the conference call this morning. Adding to the poor results, AOL’s audience—whose growth has been a bright spot in the AOL story—dipped to an average of 106 million monthly unique visitors from 109 million at the end of 2008.   

More Time Warner results after the jump.

—Networks: Revenue from Turner Networks and HBO grew 6 percent—subscription revenue grew 9 percent and ad revenue declined 2 percent—while operating income rose 10 percent. Cable networks continue to benefit from subscription contracts and even advertising held up fairly well versus broadcast TV advertising, which is expected to be down by double-digits for the quarter. In fact, the company said that most of the declines in ad revenue were driven by international advertising, which indicates U.S. advertising may have been up during the quarter.

—Publishing: Revenue at Time Inc. declined 23 percent and the unit posted an operating loss of $32 million, a decrease of $125 million from the prior year’s quarter. Most were expecting poor ad revenue results so Time Inc.‘s revenue declines of 30 percent, while dismal, shouldn’t come as too much of a surprise. The company also reported online revenues declined during the period, indicating Time Inc. was not spared the weakness experienced by online advertising during the quarter either. 

—Filmed Entertainment: Revenue from the company’s Warner Brothers unit dropped 7 percent while operating income grew 17 percent. Revenue declines were driven by lower DVD sales but buoyed by gains from its TV licensing and interactive video games divisions. F.E.A.R. 2: Project Origin sold well for the interactive video games division during the quarter. Operating income grew during the quarter mostly due to lower print and advertising expenses around DVD and movie releases.

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