Time Warner profit rises

Growth in cable, high-speed broadband and digital phone subscriptions help per-share earnings meet estimates.

Time Warner, the world's largest media company, on Wednesday said quarterly profit rose, with strong growth in cable television, high-speed Internet and digital phone subscribers.

Earnings rose to $1.5 billion, or 32 cents per share, from $915 million, or 19 cents per share, a year ago.

Excluding items in both quarters, largely one-time gains from asset sales, it posted a 20-cents-per-share profit, compared with 17 cents share a year earlier. The Reuters Estimates average analyst expectation was 20 cents per share.

The New York-based owner of the AOL Internet service and portal, Warner Brothers movie studios and HBO cable network said revenue rose 1 percent to $10.5 billion. Cable revenue rose 15 percent to $2.6 billion. It added 82,000 basic video subscribers, its largest quarterly gain in six years.

It added 241,000 digital video customers, 346,000 high-speed Internet subscribers. It also added 270,000 digital phone subscribers, its biggest gain ever.

Results were dragged by a 7 percent decline in AOL revenue as it lost 835,000 subscribers from the fourth quarter to high-speed Internet services. It lost 147,000 subscribers in Europe. AOL ended the quarter with 18.6 million U.S. subscribers.

AOL, which has focused most of its efforts on boosting its free online Web site to increase advertising revenue saw ad sales rise 26 percent in the quarter.

Shares in Time Warner have trailed the S&P 500 Index by 5 percent since the start of the year. The stock picked up last month as investors hoped for strong growth after rivals in the cable sector like Comcast posted better-than-expected results.

Time Warner's enterprise value--market capitalization plus debt minus cash--is about eight times its estimated 2007 earnings before interest, taxes, depreciation and amortization, compared with News Corp.'s 11.5 times valuation.

The company reaffirmed its full-year financial outlook. It expects full-year 2006 adjusted operating income before depreciation and amortization growth to be in the high-single-digits percentage range.

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