New York - Profits at Time Warner media enterprise dropped 14 per cent in its fiscal first quarter as revenues were hit by an advertising slump and lower sales of DVDs.

The world's largest media company said that it earned 661 million dollars compared to 771 million dollars in the same quarter a year ago.

Revenue fell 7 per cent to 6.95 billion dollars. However the financial results beat Wall Street's expectations and the company's shares rose sharply in early trading Wednesday.

The company's troubled internet unit AOL saw revenue plummet 23 per cent to 867 million dollars from 1.2 billion dollars. The 20-per- cent drop in AOL's ad revenues was offset somewhat by the company's cable networks, which say revenues rise by 6 per cent.

But sales at the company's filmed entertainment division dropped 7 per cent as it had only five major DVD releases in the quarter compared to 13 in the first quarter of 2008.

Revenue also slumped 23 per cent to 806 million dollars at the Time Inc publishing unit due to weak advertising.