Time Warner reported sharply higher earnings thanks to a cable deal with Adelphia and an emerging turnaround at its AOL unit, but investors fretted over slower new phone customer growth at the nation's second-largest cable company, an Associated Press report said.
The Associated Press report said the leading media conglomerate, which owns the Time magazine publisher, Warner Bros., CNN and HBO, earned $2.3 billion in the third quarter, versus $853 million a year ago.
Revenues rose 7% to $10.9 billion, shy of the $11.1 billion estimate of analysts polled by Thomson Financial, the report said.
The earnings jump was driven by an adjustment related to its recently closed deal with Comcast to acquire the cable systems of Adelphia Communications as well as several asset sales and other one-time effects, the report added.
AOL turned in strong results, including a 46% gain in advertising revenues, as the unit executes a plan announced three months ago to overhaul its business model away from selling Internet access subscriptions and toward selling online advertising, a strategy used successfully by online rivals Google and Yahoo, the report said.
AOL's gains in advertising weren't enough to offset a 13% decline in subscription revenues in the quarter, however, leaving the unit with a total revenue fall of 3%.
Profits rose 21% as marketing and other costs declined, the Associated Press report further said.