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Time Warner's third-quarter profit rises on cable network strength

People walk in front of the Time Warner Inc. headquarters building at Columbus Circle in New York October 13, 2005. REUTERS/Nicholas Roberts

By Liana B. Baker

(Reuters) - Time Warner Inc on Wednesday posted higher third-quarter profit, beating Wall Street estimates on growth in advertising and subscription fees at its cable networks.

Shares rose 2.7 percent to $70 in premarket trading.

Revenue at its cable unit, which includes Turner Broadcasting channels such as CNN as well as premium movie service HBO, increased 5 percent to $3.5 billion. Advertising was up 11 percent to $96 million.

Revenues fell 7 percent to $2.7 billion at its Film and TV Entertainment unit that includes Warner Brothers. It blamed the decline partly on a tough comparison to a year ago, when it benefited from the strong box office for the Batman movie "The Dark Knight Rises."

Its Time Inc publishing unit, which it plans to spin off next year, suffered a 2 percent fall in revenue.

Net income for Time Warner was $1.18 billion, or $1.26 cents per share, for the quarter ended September 30, up from $822 million, or 84 cents a share, a year ago.

Adjusting for discontinued operations and other items, earnings per share were $1.01, which beat Wall Street estimates by 12 cents.

Revenue rose 0.2 percent to $6.86 billion. Analysts expected $6.94 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Liana B. Baker; Editing by Jeffrey Benkoe)