NEW YORK (CNN/Money) - AOL Time Warner Inc. announced Wednesday that it will restate results for the two years ended in the second quarter as a result of questionable advertising and commerce transactions at its troubled America Online division. At the same time, executives of AOL Time Warner reaffirmed their most recent forecast for revenue and earnings this year.

The restatement will erase $190 million in revenue and $97 million in earnings before taxes and other items from its books, the world's biggest media company said.

The company, the parent company of CNN/Money, said it does not expect further restatement of results. "Although our internal review is ongoing, based upon the substantial work that we have done today, we do not expect that this internal review will result in any further adjustments to our financial statements," AOL Time Warner Chairman and CEO Richard Parsons said on a conference call Wednesday.

He added, however, that the Securities and Exchange Commission and the Justice Department each are continuing their own probes. "We cannot predict the outcome of those," Parsons said.

Executives of AOL Time Warner also reaffirmed their most recent forecast for revenue and earnings this year, saying that strength in other business areas, especially television, will offset ongoing weakness at America Online, which has been struggling with a deteriorating online advertising market and sluggish subscriber growth.

The news sent AOL Time Warner's stock higher in extended hours trade. Shares were 6.1 percent higher at $14.25 on the Instinet trading system late Wednesday after rising 3 cents on the New York Stock Exchange.

Linda Bannister, who follows the company for Banc of America Capital Management, called the restatement an "incremental positive" because it puts some of the company's accounting questions to rest.

"They've taken a step in the right direction, but we are not all the way there yet," said Bannister, referring to the ongoing accounting probes by the SEC and the Justice Department.

Last July, AOL Time Warner executives said that the America Online unit may have overstated its revenue for three deals totaling about $49 million. But many company watchers recently had expected that number to climb amid unconfirmed reports and rumors of more deals under question.

During the company's internal review, Parsons said AOL Time Warner had identified several other transactions that were improperly recorded, including some "where a significant degree of accounting judgment was exercised."

The company's America Online unit, which executives put forward as the driver of future growth when they pitched the merger of AOL and Time Warner in 2000, has instead become something of a liability. And its problems go far beyond the questions about accounting.

Rather than the double-digit growth executives had promised as the merged company's Internet and media properties cross-marketed one another, America Online's results have in recent quarters been a drag on the New York City-based company's financial results.

The ailing Internet unit has been hit hard by a protracted slump in online advertising spending as well as slowing subscriber growth. It also is struggling to hold on to its existing subscribers as they make the switch from dial-up connections to high-speed digital subscriber line (DSL) and cable Internet connections.

Bannister, who owns AOL Time Warner shares but whose employer has no investment banking relations with AOL, called the online advertising numbers "horrible."

"We don't really know where this will bottom out," she said, while adding the that company's Time Warner assets are doing "quite well."

That trend continued in the third quarter, as AOL's other business units -- which include television networks such as HBO, movie and music production, as well as magazines including Time and Fortune, and cable television service -- all logged improved operating results.

However, the company provided very few specifics about America Online, promising to do so on Dec. 3, when the company hosts an "AOL Day" to explain in detail what has been happening there and what it plans to do to stem its losses.

"I'm satisfied with the company's overall performance," Parsons said. "Except for America Online, our business is doing quite well."

For the third quarter, AOL Time Warner reported third-quarter net income of $57 million, or a penny a share, compared with net profit of $395 million, or 9 cents a share, a year earlier. Third-quarter revenue rose to $9.9 billion from $9.4 billion.

The company's cash earnings -- which excludes depreciation, amortization and other items -- came in at $2.2 billion, slightly below the year-ago quarter. Executives entered the quarter expecting to log cash earnings even with or slightly better than the year-ago period.

On a per-share basis, AOL Time Warner's cash earnings for the third quarter totaled 19 cents, which was in line with most analysts' expectations and down from 30 cents per share a year ago.

The America Online unit's third-quarter revenue fell 6.9 percent to $2.22 billion. Total world-wide subscriptions rose just 206,000 to 35.3 million, while U.S. membership rose 129,000 to 26.7 million, the company said.

At the same time, AOL Time Warner said revenue from its film businesses surged 25 percent to $2.64 billion. The company credited the home release of hit movies, including "The Lord of the Rings," and the theater success of "Austin Powers in Goldmember" for the strong results there.

Revenue from cable-television services rose 14 percent to $1.75 billion, with a 47 percent increase in subscribers to digital-cable services, bringing the total number to 3.5 million. The company logged a 69 percent increase in cable Internet service subscribers, who now total 2.3 million.

Meanwhile, AOL Time Warner said its television networks logged a 10 percent increase in revenue. The company's music business also chalked up a 10 percent gain in revenue. Revenue from publishing operations rose 11 percent.

Looking ahead, executives of AOL reiterated their most recent full year-revenue forecast, saying they expect full-year revenue growth within a range of 5 percent to 8 percent. Full-year cash earnings growth is expected to come in at the low end of the previously announced range of between 5 percent and 9 percent, they said.

"We expect to see strong fourth-quarter performance across all of our businesses except America Online," said AOL Chief Financial Officer Wayne Pace.

The so-called "scatter" ad market -- reflecting ads that are purchased close to air time -- currently is up about 10 to 20 percent over the "upfront" ad-purchase contracts that were signed in the spring, Pace said.  

-- CNN/Money Staff Writer Jake Ulick contributed to this report