Time Warner earnings increase 5%

Strength in cable TV helped Time Warner Inc. increase second-quarter earnings 5%, beating analyst forecasts Wednesday, though the results were clouded by the AOL Internet unit.

The New York-based media conglomerate, which owns CNN, HBO and the Time Inc. publications, said it earned $1.07 billion, or 28 cents a share, ahead of last year’s profit of $1.01 billion, or 24 cents. Revenue rose 6% to just under $11 billion.

Excluding discontinued operations and gains from an accounting change, Time Warner said it would have earned 25 cents a share. On that basis, analysts polled by Thomson Financial were expecting 21 cents a share. The revenue forecast had been $11.1 billion.

Although Time Warner also announced a $5-billion stock buyback plan, shares fell 62 cents to $18.64 on Wednesday.

One cause for investor concern was AOL, where revenue fell 38% to $1.3 billion. AOL has been shifting to an advertising-focused approach in which many services are now free. But ad revenue rose just 16%, well below the growth of more than 40% seen in each of the last four quarters.