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Time Warner Hits Targets

Growth at its cable and movie segments offset AOL weakness.
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Time Warner (TWX) posted third-quarter results that met analysts' estimates, as strong growth in its cable and movie segments offset declines in its AOL division.

The media conglomerate's net income fell to $1.09 billion, or 30 cents a share, from $2.32 billion, or 57 cents a share, a year earlier, when results included gains from asset sales and tax-related items.

Earnings from continuing operations were 24 cents a share in the latest quarter, matching Thomson Financial's average analyst estimate. The company earned 19 cents a share on a comparable basis a year ago.

The New York-based company posted revenue of $11.68 billion, up from $10.75 billion a year earlier. Analysts anticipated revenue of $11.36 billion.

Time Warner saw the biggest revenue growth at its filmed entertainment division, where the top line jumped 33% to $3.18 billion. Operating income more than doubled to $268 million.

The segment, consisting of the Warner Bros. and New Line Cinema studios, was helped by strong theatrical performances from films like

Harry Potter and the Order of the Phoenix


Ocean's 13



. DVD sales were boosted by the release of Warner Bros.'


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The company's cable division,

Time Warner Cable


, saw revenue jump 25%. Revenue growth at the division was boosted by the acquisition of Adelphia Communications' assets, which occurred in the middle of the third quarter last year.

The network segment, consisting of Turner Broadcasting and HBO, recorded a 6% revenue rise to $2.56 billion. Time Warner said the rise was due to higher ancillary sales of HBO programming, with a modest increase in subscription revenue.

At AOL, Time Warner's struggling Internet division, revenue dropped 38% to $1.2 billion, hit by the company's plan to offer the service for free. Subscription revenue declined 56%, while advertising revenue rose 13%. Operating income declined 24% to $295 million.

With its stock price stagnant, Time Warner shareholders have been pushing the company to get rid of the floundering AOL. CEO Dick Parsons, viewed as a supporter of AOL, is leaving at the end of the year, and some on Wall Street expect incoming chief Jeff Bewkes

to make a big move with the division.

Elsewhere, Time Warner's struggling publishing division, Time Inc., recorded roughly flat revenue of $1.2 billion. The company said advertising revenues benefited mainly from higher digital revenues, led by and Those were offset by a decrease in print magazine revenues, which included the impact of the closures of



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