Time Warner Wednesday posted a higher quarterly profit, matching expectations, on more subscribers to its package of digital cable services and strong box office results for the latest "Harry Potter" film.
The results came two days after the world's biggest media company named President Jeffrey Bewkes as chief executive, effective Jan. 1. The move has stoked expectations of more aggressive structural changes.
Also on Wednesday, Time Warner's AOL unit said it would purchase advertising technology firm Quigo to bolster its advertising network and technologies, a deal one source said was worth about $340 million.
Time Warner's third-quarter profit rose to 24 cents per share from 19 cents a year earlier, excluding special items in both periods.
Net income fell to $1.1 billion, or 29 cents per share, from $2.3 billion, or 57 cents per share, a year earlier, when the company took several large gains.
Revenue rose 9 percent to $11.7 billion, ahead of Wall Street expectations of $11.33 billion, according to Reuters Estimates.
AOL revenue fell 38 percent to $1.2 billion as the sale of Internet access businesses in the United Kingdom, France and Germany drove subscription revenue down 56 percent. The company restructured its business last year by offering most of its services for free to boost online advertising sales.
The subscription revenue decline offset a 13 percent rise in AOL's advertising sales. Time Warner shares had fallen after the unit reported second-quarter ad revenue growth of 16 percent, compared with percentage gains of more than 40 percent in the prior four periods.
Cable division revenue rose 25 percent to $4 billion. The company added 220,000 net new customers who took a combination of digital phone, video and broadband services.
But basic video subscribers decreased by 83,000 during the quarter, worse than some analysts had forecast, following a cable industry trend amid tougher competition against phone companies offering similar services. The majority of the declines came from newly acquired systems.
Revenue at Time Warner's movie division rose 33 percent to $3.2 billion, led by box office sales of "Harry Potter and the Order of the Phoenix" and DVD sales of "300." Operating income more than doubled to $268 million.
The company affirmed an earlier financial outlook for a full-year rise in adjusted operating income before depreciation and amortization in the mid-to-high teens percentage range, from $11 billion reported for 2006.
The latest net income results included investment gains and tax benefits. In the year-earlier period, Time Warner booked large gains from the purchase of cable operator Adelphia Communications, the sale of its interest in Time Warner Telecom and Warner Bros.' Australian theme parks, and other tax benefits.
Shares of Time Warner are down about 24 percent since the beginning of the year, but rallied 3 percent on Tuesday in anticipation of rosier earnings.