Updated from 9:52 a.m. EDT: Buoyed by robust advertising growth, media giant Time Warner ( TWX) said Wednesday that third-quarter cash flow grew 13%, pushing the company past Wall Street estimates. The second-biggest U.S. media company, whose merger with America Online ( AOL) awaits regulatory approval in the U.S., said earnings before interest, taxes and amortization (EBITA), adjusted for unusual items, rose to $1.27 billion, or 7 cents a share, from $1.13 billion, or 7 cents share, in the year-earlier period. Analysts surveyed by First Call/Thomson Financial had projected earnings before items of 4 cents a share.
terminated earlier this month under mounting pressure from European antitrust regulators. "It isn't dead yet. Stay tuned," Time Warner President Richard Parsons said on the conference call. The two companies are in exclusive negotiations until Jan. 31, Time Warner said. Levin said Time Warner also is in talks with AT&T ( T) about restructuring the two companies' joint ownership of Time Warner Entertainment. AT&T holds a 25.5% stake in TWE, which owns most of Time Warner's cable systems as well as Warner Bros. and premium cable network Home Box Office cable network. AT&T also competes with Time Warner Cable with its own cable systems. AT&T inherited the stake when it acquired MediaOne Group, and federal regulators have told the company that divesting its stake in the company is one way to comply with federal ownership limits.