Time Warner sales flat but profit surges 44%

Time Warner Inc. said its profit grew 44% in the third quarter while revenue remained flat.

The media giant, whose holdings include Warner Bros., HBO and Turner Broadcasting, posted profit of $1.18 billion thanks to its cable unit as well as reduced programming costs and gains from an acquisition. Revenue for the quarter was $6.9 billion.

The cable unit, particularly the Turner networks (TNT, TBS, TruTV), had a strong quarter, with revenue increasing 5% to $3.8 billion as advertising and subscription fees grew. Also, Time Warner Chief Executive Jeff Bewkes said Turner had recently completed a new distribution deal with Verizon. And HBO continues to have strong international growth.

Beefing up subscription fees for the Turner networks has been a priority for Time Warner and has helped push its stock up more than 40% in the last year.

Although CNN’s ratings have been in a tailspin in recent weeks, Bewkes spoke confidently about CNN President Jeff Zucker’s plans to reinvigorate the network by creating more original programming and being relying less dependent on breaking news.

At Warner Bros., revenue fell 7% to $2.7 billion. Although “We’re the Millers” and “The Conjuring” posted solid results, the studio’s third quarter paled in comparison with the same period last year, which included “The Dark Knight Rises.” It also got a boost reruns of the sitcom “The Middle.”

But Bewkes said the studio is on pace for a record year, fueled by “Gravity” and the upcoming “The Hobbit: Desolation of Smaug,” which is expected to do blockbuster numbers worldwide.

The publishing unit, home to Time, People and other titles, revenue fell 2% to $818 million. Time Warner is in the process of spinning off Time Inc. early next year.