Cable Networks Help Time Warner\'s Quarterly Profit

A strong quarter at Time Warner's suite of cable networks contributed to the company's 1.9 percent increase in third-quarter net profit, but revenue was offset by continued weakness at its magazine and movie divisions.

Time Warner reported net income of $838 million in the quarter that ended Sept. 30, or 86 cents a share, compared with $822 million, or 78 cents a share, in the same period last year. Overall revenue at the company fell 3 percent, to $6.8 billion.

The company's networks division, which includes cable channels like TNT, TBS and HBO, reported its best quarter ever, with $1.2 billion in operating income, a 12 percent increase from 2011.

The gap between the high-performing television networks and the company's Time Inc. publishing unit and Warner Brothers movie studio was stark. TBS was up 35 percent in prime-time viewers aged 18 to 49, for example, while at Time Inc. subscription and advertising revenue fell 6 percent and 5 percent.

Ove rall revenue fell 6 percent to $838 million at Time Inc., the publisher of People, Sports Illustrated and Entertainment Weekly among other magazines. Operating income at Time Inc. increased by 2 percent, largely because of cost-cutting.

The company's movie and television studio suffered mostly because of comparisons to the same three-month period last year, which included revenue from hits like “Harry Potter and the Deathly Hallows: Part 2″ and syndication revenue from “The Big Bang Theory.” Revenue at the film and television division fell 12 percent to $2.9 billion, and operating income fell 37 percent to $328 million.

“Our studio faced difficult comparisons in the third quarter, but Warner Brothers Television is having a terrific broadcast season,” said Jeffrey L. Bewkes, chief executive of Time Warner. He added: “Over all, I'm very confident about how we're positioned heading into the next year and beyond.”