Time Warner Inc reported a higher-than-expected quarterly profit on Wednesday as it lost less cable advertising than anticipated to Olympics coverage by Comcast Corp's NBC television network.
Shares of Time Warner, which owns a host of cable networks, premium TV service HBO, magazines and a movie studio, rose nearly 4 percent.
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For the third quarter, Time Warner logged a 4 percent revenue increase at its networks division, which includes TNT, TBS, HBO and CNN. But the growth stemmed from subscription revenue from cable operators, while advertising in the segment fell 1 percent.
Macquarie analyst Tim Nollen had expected ad revenue to fall 3 percent, while Nomura analyst Michael Nathanson had forecast a decline of 2 percent.
Nathanson said advertising revenue had suffered because of the Olympics, which lasted 17 days in the third quarter and helped rival Comcast's NBC Universal score an additional $1.2 billion in quarterly revenue.
Time Warner's Chief Executive Officer Jeff Bewkes said in a statement that the company was "experiencing good momentum" across most of the Turner networks, such as TBS.
HBO gained domestic subscribers, Time Warner said, without providing figures. Lazard Capital Markets analyst Barton Crockett said HBO Go, the popular Internet streaming service for HBO customers, could be reviving subscriber growth.
Time Warner affirmed its full-year outlook, which calls for earnings growth, excluding special items, at a low double-digit percentage rate from $2.89 a share last year. Analysts have forecast $3.20.
A day earlier, Time Warner peer Discovery Communications Inc cut its revenue outlook for the year. [ID: nL1E8M620D]
Also on Tuesday, media company News Corp reported strength in its cable unit, lifted by growth at regional sports networks, the FX cable network and Fox news channel.
Third-quarter net income at Time Warner rose to $838 million, or 86 cents a share, from $822 million, or 78 cents a share, a year earlier.
The results beat the analysts' average estimate of 82 cents per share compiled by Thomson Reuters I/B/E/S.
Revenue fell 3 percent to $6.84 billion. Analysts were expecting $6.89 billion.
Revenue at the film and TV entertainment unit dropped 12 percent, or $400 million, from a year earlier, when the company released "Harry Potter and the Deathly Hallows: Part 2," the final installment in the fantasy series.
Revenue in the publishing unit, whose titles include Time and Sports Illustrated, declined 6 percent, or $51 million, as advertising sales and subscription revenue fell.
Time Warner shares were up 3.7 percent at $44.71 in morning trading.