EARNINGS REPORTS

TIME WARNER TO RESTATE 2000, 2001 EARNINGS

Time Warner continues to be dogged by accounting issues, disclosing yesterday it will restate earnings from 2000 and 2001 to include losses from AOL Europe and set aside $500 million to cover costs related to federal investigations into accounting at its America Online unit.

The so-called “legal reserves” helped depress third-quarter net income, which fell 7.8% despite relatively strong results from most of the media company’s operations.

Time Warner posted net income of $499 million, or 11 cents a share, compared with net income of $541 million or 12 cents a year earlier. Revenue rose 5% to $10 billion driven by good results in its cable-networks and cable systems divisions. But America Online’s revenues continue to be lackluster, hurt by defection of AOL subscribers to high-speed Internet services.

Time Warner’s planned restatement of past earnings follows an internal probe and discussions with the Securities and Exchange Commission. It will be the second restatement the company has taken since Chief Executive Richard Parsons took over management of the company in 2002, a year after Time Warner and AOL merged. The SEC inquiry into America Online’s accounting began around that time.

The restatement will affect results in 2000, 2001, and possibly 2002, the company said. AOL Europe lost hundreds of millions of dollars in each of 2000 and 2001, so the restatement could increase Time Warner’s reported loss for 2001 and reduce its reported net income for 2000, depending on the final accounting treatment, Time Warner said.

POLO RALPH LAUREN UP ON STRONG 2Q

Polo Ralph Lauren Corporation said yesterday that strong sales in its women’s clothing and in its new children’s wear line helped it to a particularly strong second quarter of fiscal 2005.

For the three-month period ended Oct. 2, the apparel company reported net in come of $80.4 million, or 78 cents a share, up from $54 million, or 54 cents a share, last year.

The results beat analysts’ average per share earnings estimate by 5 cents, according to Thomson First Call.

Revenue in the quarter rose 25% to $883.7 million, year-over-year.

Revenue growth was aided by “the women’s Lauren line, the addition of our children’s wear business as well as gains on our European wholesale business,” said company spokeswoman Nancy Murray during a conference call with analysts Wednesday.

Retail sales grew 7.4% to $319.0 million, while same-store sales rose 3.7% for the quarter. Retail comparable store sales in the second quarter were up 3.7%. The company also reiterated its fiscal 2005 earnings outlook for per-share earnings of $2.35 to $2.45.The Thomson First Call estimate is $2.45.

TOMMY HILFIGER DOWN ON WEAK 2Q, LEGAL WOES

Shares of Tommy Hilfiger Corp. dropped 8% yesterday after the clothing company reported weaker second quarter pretax results and said it would delay the filing of its quarterly report while it reviews issues related to a government investigation. The Hong Kong-based company said pretax income in its fiscal second quarter ended September 30 fell 14% to $69.3 million from $81 million a year earlier. Net revenue fell 2% to $536.1 million from $547.9 million a year earlier. But the company won’t report full second-quarter results to the Securities and Exchange Commission until it completes the review. Its Form 10Q quarterly report would have been due November 9 to the SEC. Tommy Hilfiger disclosed in September that the Justice Department was probing whether certain company units inappropriately paid commissions to Hilfiger’s British Virgin Islands unit, as well as other tax matters. The company said yesterday it is providing documents and other information to the U.S. Attorney’s Office for the Southern District of New York. Hilfiger shares fell 95 cents to $8.50, on volume of 635,600.

– Dow Jones Newswires