Time Warner met expectations for Q307 with revenues of $11.6 billion, up 9 percent, and earnings of $0.30 per share. Profits dropped 53 percent from Q206, which included extraordinary gains and discontinued operations, but adjusted operating income rose 15 percent, to $3.2 billion from $2.8 billion.

AOL: Revenues declined 38 percent to $1.2 billion. Subscription losses, caused in large measure by the sale of AOL’s European ISPs, continue to drag AOL (NYSE: TWX) down, offset, in part, by advertising gains of 13 percent. As the company warned earlier, the ad increases are not as high as originally predicted. Operating income dropped 23 percent to $295 million.  The most alarming detail: Display advertising was weak, with growth of only 6 percent compared with 15 percent the previous quarter. Paid search on the AOL Network grew 15 percent while partner-site revenue rosed 21 percent.  AOL was responsible for 12 percent of Time Warner’s overall revenues.

Earnings release (pdf) | Webcast  | Slides | Transcript (SeekingAlpha.com)

10Q watch: AOL subsidiary Advertising.com is losing exclusivity with a major customer, the Apollo Group. (Apollo wasn’t identified specifically in the earnings report or the 10Q filed today but presidemt and COO Jeff Bewkes mentioned the name during the earnings q&a.) The projected continued slowdown in ad revenue growth in Q108 “anticipates a significant decline” in revenues from Apollo, which was responsible for $220 million in ad revenue through the first nine months of 2008.

Restructuring: AOL plans to take more restructuring charges in Q4 and in Q108.

Time Inc.: Digital ad revenues account for 6 percent of Time Inc.‘s total ad revenues.

M&A: AOL has transferred the assets of mobile search company Wildseed LLC, acquired in 2005, to a third party.