Time Warner Roll Slows

Updated from 6:55 a.m. EST

Third-quarter results from Time Warner (TWX) that fell short of expectations failed to add fuel to the rally that has pushed the media giant's stock price up 21% over the last three months.

The world's largest media conglomerate on Wednesday posted a huge spike on its bottom line, but much of the gain resulted from asset sales and adjustments related to its deal to acquire cable systems from Adelphia.

Excluding that one-time item, the results didn't do much to impress investors, though the company backed its outlook for 2006 results and is continuing with its massive share buyback.

Time Warner -- owner of AOL, Time Inc., Warner Bros. and HBO -- reported net income of $2.3 billion, or 57 cents a share, up sharply from the $853 million, or 18 cents a share, it recorded for the same quarter last year.

The earnings included 23 cents a share from discontinued operations related to cable systems that Time Warner handed off to Comcast (CMCSA) during the quarter in a three-way deal related to Adelphia's assets.

Another 14 cents a share came from the sale of Warner Bros.' Australian theme park business.

Excluding special items, Time Warner reported earnings of 19 cents a share, compared with 17 cents a share last year.

On that basis, analysts were expecting earnings of 20 cents a share, according to Thomson First Call.

The company's top-line results also disappointed.

Time Warner logged a revenue gain of 7% to $10.91 billion from last year's $10.24 billion.

Analysts were expected revenue of $11.07 billion.

Shares of Time Warner recently were down 12 cents, or 0.6%, to $19.89.