(Adds remarks by CFO, analyst's comment.) By Nat Worden and Kerry Grace Benn Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- Time Warner Inc. (TWX) said Wednesday it swung to a fourth-quarter profit, beating analysts' forecasts, as the company saw strength from its film and networks businesses.

The media giant also raised its quarterly dividend 13% to 21.25 cents a share. That move comes a day after competitor News Corp. (NWS, NWSA) raised its six-month dividend for both classes of its stock by 25%.

For 2010, Time Warner said it expects adjusted earnings to grow by a percentage rate "in the mid-teens," which is in line with expectations on Wall Street.

Shares of Time Warner, however, traded lower early in Wednesday's session amid a broader market decline. The stock was recently down 1.6% to $28.04.

Frederick Moran, analyst with The Benchmark Co., attributed the sell-off to a "cautious investment community," saying Time Warner's results mostly beat expectations and the increased share buyback and dividend increase displayed the company's confidence in its 2010 prospects.

Moran noted that the quarter marked Time Warner's return to overall revenue growth after a year's worth of declines, and while advertising revenue remained down, he was heartened by the company's view the ad revenue at its cable networks will return to growth this year.

"Time Warner's operations were more resilient in the downturn than most other media companies, and it's now in a position to take market share in a recovery," said Moran, who holds a buy rating on Time Warner shares with a $35 price target.

Strong results from both Time Warner and News Corp., which owns this newswire, are an early sign that pressures on big media conglomerates may be easing. Media companies have been struggling amid the changing landscape of their industry with the rise of the Internet as well as the lingering effects of an advertising downturn that came with the global financial crisis.

With its eyes on being the top content provider across technologies, Time Warner has been shuffling its broad portfolio of media properties, including last year's spinoffs of its cable business and Web media unit AOL.

A decade after its ill-fated $106 billion merger with AOL, Time Warner in December spun the former Internet pioneer off to the public, eliminating one drain on its revenue. The other major drain, magazine division Time Inc., has slashed jobs and restructured. The company takes the view that much of the downturn in magazine advertising is "cyclical," rather than permanent, though analysts have said they expect Time Inc. to be next up for restructuring.

The company's chief financial officer, John Martin, said on a conference call with analysts following the release that advertising trends at Time Inc. showed improvement in the fourth quarter.

Time Warner reported a profit of $627 million, or 53 cents a share, from a year-earlier loss of $16.03 billion, or $13.41 a share. The prior-year results included a $7.2 billion write-down.

Adjusted earnings rose to 55 cents from 19 cents, beating the average analyst estimate of 52 cents a share, as reported by Thomson Reuters.

On its top line, revenue rose 2.2% to $7.32 billion, beating expectations for $7.14 billion in revenue.

Operating profit at the company's networks business rose 32% as revenue climbed 4.1%.

The company's chief executive, Jeff Bewkes, said recent events in the industry, such as NBC's decision to return scripted programming to the 10 p.m. time slot on weeknights and a push among broadcast networks to secure subscription fees from cable operators, bode well for its Warner Bros. business.

"Demand for high-quality scripted programming seems to be going up and that is right in Warner Bros.' sweet spot," said Bewkes.

Filmed-entertainment earnings jumped 61% while revenue rose 6.6% thanks to the company's successful slate of theatrical and DVD releases in 2009. Bewkes declined to comment on potential studio acquisitions except to say the company would be "strategic and opportunistic" when evaluating deals, with focus on returns on invested capital.

Time Warner is reportedly involved in bidding for Metro-Goldwyn-Mayer Inc. The Walt Disney Co.'s (DIS) Miramax Films studio also is believed to be a potential target.

Earnings from Time Warner's publishing division totaled $79 million, compared with a loss of $7.1 billion a year-ago that reflected the write-down. Publishing revenue was down 15% to $1.1 billion. Bewkes said the company would continue cutting costs out of the division and focusing on its most popular magazine titles while experimenting with emerging digital opportunities, such as electronic reading devices.

(Nathan Becker contributed to this article)

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