Time Warner Inc., the world's largest media company, today posted a 27 per cent rise in fourth-quarter profit on strong growth in advanced cable services, film box office sales and cable advertising.
Earnings rose to $1.4 billion, or 29 cents per share, from $1.13 billion, or 24 cents per share, a year earlier, beating analysts' forecasts of 21 cents, according to Reuters Estimates.
The owner of Warner Brothers film studio, AOL and CNN said revenue rose 7 per cent to $11.9 billion.
Gains were driven in part by the cable division, whose revenue rose 13 per cent and operating income before items increased 11 per cent.
Basic video subscribers grew 34,000 from the third quarter. The company ended the year with about 11 million basic video subscribers.
Time Warner Cable added 265,000 residential high-speed Internet subscribers and 246,000 digital phone subscribers in the quarter.
Revenue at the AOL online division fell 8 per cent as it lost 625,000 subscribers in the quarter. In December, Internet giant Google Inc. agreed to invest $1 billion in the division and to strike a broad ranging advertising partnership.
Time Warner's adjusted operating income before depreciation and amortization, a closely tracked performance metric, rose 18 per cent to $2.9 billion.
The company faces a proxy battle by a group of investors led by activist shareholder Carl Icahn, which collectively owns about 3 per cent of the stock.
Time Warner stock, like much of the media sector, has suffered from looming competition from the Internet, and decelerating DVD sales growth. Shares have trailed the S&P 500 index by 12 per cent over the past year.
The stock trades at 8.35 times estimated 2006 earnings before interest, tax, depreciation and amortization, compared with multiples of 9 for Walt Disney Co. and 10.5 for the new Viacom Inc..
Looking ahead Time Warner said it expected full-year 2006 growth in adjusted operating income before depreciation and amortization to be in the high-single digits percentage range, off a base of $10.3 billion in 2005.