NEW YORK (CNN/Money) - AOL Time Warner Inc. posted first-quarter earnings Wednesday that beat Wall Street expectations and the company's own internal plans, as executives said the media and Internet conglomerate is on track to meet its earnings targets for the full year.

The media company earned about $359 million, or 8 cents a share, excluding one-time gains and special items. That's down slightly from the $405 million, or 9 cents a share, it earned on that basis from continued operations a year earlier, but it is well above the First Call analysts' consensus forecast of 4 cents.

Shares of AOL Time Warner (AOL: up $0.60 to $13.91, Research, Estimates) gained about 3 percent in early trading Wednesday following the report.

Executives did not give any details on ongoing Securities and Exchange Commission or Justice Department probes into its accounting practices. But CEO Richard Parsons and Chief Financial Officer Wayne Pace did tell investors during the conference call that the probe could delay its plans for an initial public offering for a minority stake in its cable business.

That IPO is a key component of its plans to reduce $26.3 billion in debt at the company, which Parsons has described as his top priority. But Parsons said that even with the delay in the IPO, the company should be able to make its previously-stated targets at the end of this year and next for reducing debt.

"It is possible the SEC ... the two streams will cross," said Parsons, referring to the agency's investigation and approval of an IPO. "We haven't gotten to that bridge yet, let alone figured out how to cross it. We, like everyone else, have to think of alternative ways to get home if one road is blocked."

The company originally hoped the IPO would be completed in the second quarter. Parsons said it now looks like it most likely will be in the second half of the year.

The company executives said cash generated by different units, especially filmed entertainment, was above expectations, helping the company to keep debt only slightly above the $25.8 billion level at the end of 2002, despite the company having to pay $2.1 billion in cash to Comcast for buying out part of the company's stake in its cable units.

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"We're very comfortable where we are in debt reduction program," said Parsons. "I have every confidence we've got more than one way to get there. We have a number of alternatives, we're exploring them all."

The company also has been looking for assets sales to reduce debt. The company announced the $1.23 billion sale of its 50 percent stake in cable network Comedy Central to Viacom Inc. Tuesday.

Company officials previously have identified three professional sports teams in Atlanta, the book publishing division, and all or parts of its music business as possible candidates for sales. They would did not give many more details on possible sales Wednesday.

Jeffrey Bewkes, chairman of the company's entertainment and networks group, which includes music, said of that unit's CD manufacturing business, "Clearly (it is) a business we would exit for the right price."

Including special items, the company posted net income of $396 million, or 9 cents a share, compared with a net loss of $54.2 billion, or $12.25 a share, after taking a charge of about that size to write down the value of goodwill in the year-earlier period.

Revenue rose slightly to just less than $10 billion from $9.8 billion a year earlier. First Call's forecast was for revenue of $9.7 billion.

The majority of the company's units posted improved revenue except for the America Online Internet service provider, whose revenue slipped 4 percent, and its music division, where revenue fell 3.5 percent.

But that was more than balanced out by the 17.1 percent gain in revenue in its networks division, helped by strong ad rates, and a 10.7 percent increase in revenue at its cable operations.

The company's other units include Time Inc. magazines and the Warner Bros. movie and television studio. CNN/Money also is a unit of the company.

Earnings before interest, taxes, depreciation and amortization, a closely watched measure of earnings known as EBITDA, improved 14 percent to just under $2 billion. All the units except for music had improved EBITDA. Operating income was up 9.1 percent to $1.2 billion.

"AOL pretty much blew away the EBITDA numbers. A lot of it is good news. The online unit seems to have its costs under control," Jordan Rohan, an analyst at SoundView Technology Group., told Reuters. "People had assumed the AOL unit was worth zero. It's clearly worth more than that. This has to be a positive for the company."

Music posted an operating loss of $14 million after a $20 million operating profit a year earlier. Operating profit fell 12.9 percent in its publishing division to $81 million, and slipped 5 percent in cable operations to $359 million. But the other divisions posted strong gains in operating income.

The company said it expects percentage revenue growth in the mid-single digits from the $41.0 billion it posted in 2002, and EBITDA to show a rise in the low- to mid-single digits from $8.7 billion a year earlier. The company has changed some of its accounting practices, and the new guidance is essentially unchanged from previous guidance, although the it appears a bit better than forecasts it gave when reporting fourth-quarter results.

Parsons said the better-than-expected first-quarter results are not enough to change full-year guidance because the first quarter is the least important financially to full-year results and because there are still a number of financial challenges ahead.

The company said its troubled America Online division's revenue will be essentially flat with the $9.1 billion last year, that advertising and commerce revenue will be down 35-to-45 percent from 2002's $1.3 billion, and EBITDA for the unit will between flat to down 10 percent compared with the $1.5 billion it posted in 2002.

But Don Logan, chairman of the company's media and communications group, which includes the AOL unit, said that the advertising decline is due to previously disclosed end of long-term ad contracts negotiated before the bursting of the strong market for Internet ads in 2000. He said that current ad sales are above ad sales negotiated a year ago and should end the year about 10 percent above those sold in 2002.

"In terms of business generated, we're moving in right direction," said Logan.

America Online continue its decline in membership, which occurred for the first time in the company's history in the fourth quarter of 2002, as it dropped 289,000 subscribers since the end of last year. But its 26.2 million subscribers still are 141,000 above a year earlier, and subscription revenue was up 11 percent due to increases in Europe, a favorable change in currency exchange rates, and the shift of more clients to higher-priced high-speed service.  

-- Reuters contributed to this story.