Wall Street has been waiting for news on how Time Warner CEO Jeff Bewkes is going to shake up the company. Today investors didn't get too many details, but they did get affirmation that he's moving forward with the plan.

This morning before the bell the company reported quarterly earnings of 21 cents per share, or 22 cents per share excluding one time items. This is a hair down from analysts average expectations of 23 cents per share, and a third lower than the year ago quarter's 31 cents per share earnings. On this news the Time Warner

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[TWX  Loading...      ()   ]stock is down at this posting.

The big news: the company did decide to spin off its investment in Time Warner Cable

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[TWC  Loading...      ()   ] . It currently holds 84 percent of TWC which is the second-largest U.S. cable operator after Comcast

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[CMCSA  Loading...      ()   ] , and the cable investment is Time Warner's biggest division. Since TWC was spun off to trade independently in early 2007, this option has always been on the table and Wall Street expected this decision today, with many analysts urging Time Warner to make this move.

This morning before the bell Bewkes said: "We’ve decided that a complete structural separation of Time Warner Cable, under the right circumstances, is in the best interests of both companies’ shareholders,” and saying they are in talks with Time Warner Cable about the details of the agreement, which they "expect to finalize soon."

There were no details on mechanics, or a real timeline, nor was there any indication of what the company would do with proceeds from a de-leveraging. In terms of what it's worth, analysts believe this sale could generate up to $4 billion dollars in cash for TWC.

Breaking up was also the theme when it came to talking about AOL, where earnings fell 74 percent on a 23 percent drop in revenue. Ad revenue growth has slowed to a dribble--it rose just one percent. The transition from being a paid subscription service to an ad-supported model hasn't been as swift and profitable as the company and analysts had hoped, to say the least.

Bewkes said the company failed to create efficiencies between the company's various ad-sales units, but reassured investors that the issue had been addressed. The big news here: by the end of the second quarter the company will have totally separated the AOL access and the AOL advertising units, enabling the company to spin off or sell one or both-- most likely, the access unit, which doesn't really have any operational overlap with the rest of the company.

In terms of financial highlights, the cable networks--including CNN, TBS, and TNT--are showing strong growth and increasing ad revenue as well as distribution to the key demographics. And while the Time Inc. publishing unit has been suffering from the economic downturn, ad revenues are hurting as the whole publishing industry suffers from advertising weakness.

But this is the first quarter that online ad revenue is significant enough to offset print's losses. The movie division's profits dropped 25 percent while revenues grew 3.5 percent, the company taking one-time charges on effectively merging its New Line unit, once stand-alone, into its Warner Bros. studio. And in this quarter there are high hopes for "Speed Racer" from Warner Bros., and New Line's much anticipated "Sex & The City."

Bewkes has his work set out for him. The company did not change its outlook moving forward-- which is a good thing.

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