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Broadcast, Cable Nets Propel Time Warner

Time Warner Inc. was down 2%, or 28 cents per share, in early trading Wednesday to $15.27 after reporting a 4% gain in third-quarter revenue to $10.3 billion on an operating-income gain of 7% to $1.4 billion.

For the first nine months of the year, operating income is down 2% to $3.83 billion while revenues are up 5% to $31.2 billion.

America Online Inc. is still a major problem child for the company, as revenues fell another 5% in the quarter (versus a year ago) while operating income was down 7% to $150 million. The online service lost 688,000 subscribers during the quarter.

Time Warner’s music and publishing units also posted declines in revenues and profits.

Its cable unit had a solid quarter, however, posting a 10% gain in revenues to $1.9 billion on a 6% operating income gain to $394 million.

Filmed-entertainment revenues were down 7%, largely due to a shortfall of syndicated TV revenue compared with a year ago.

Last year at this time, the unit was benefiting from off-network sales for Will & Grace
, Seinfeld
and Third Watch
, and it still had some revenue coming in from the now-canceled Rosie
first-run show. Better profit margins for theatrical films helped to boost the unit’s operating income by 21%.

The broadcast- and cable-networks division posted a 10% revenue gain to $2 billion with a 9% gain in operating income to $509 million. Subscription-revenue gains were up 9% and ad revenues were up 14% at the Turner Broadcasting System Inc. networks and up 22% at The WB Television Network, the company said.

Time Warner CEO Dick Parsons said, "Things are looking much better" compared with a year ago, but he added, "There’s a lot more to do" before the company is firing on all cylinders again.