Time Warner 2Q upbeat but economic worries drag

Pedestrians walk past "The Best Buddies Friendship Bear" a sculpture by Brazilian artist Romero Britto on display outside the Time Warner Center, Tuesday, Aug. 2, 2011, in New York. Media conglomerate Time Warner said Wednesday, Aug. 3, its second-quarter net income grew, thanks to higher revenue from its TV channel business and movies just as "The Hangover Part II."

NEW YORK -- Time Warner Inc.'s second-quarter net income increased 14 percent as the media giant recorded its fastest revenue growth in near four years. Nevertheless its stock fell because of concerns about the economy and a conservative profit outlook in spite of the blowout success of the final "Harry Potter" movie.

The results beat analysts' forecasts

The results beat analysts' forecasts and were bolstered by improved advertising sales. After all, ad revenue growth wasn't a blowout. In spite of adding NCAA college basketball playoff games to its Turner networks in a new deal with CBS Corp., ad revenue overall rose just 8 percent. That's approximately in line with what CBS reported Tuesday when stripping out one-time factors.

Revenue grew 10 percent to $7.03 billion from $6.38 billion. Analysts expected lower revenue of $6.81 billion. Time Warner said it was the fastest revenue growth since the third quarter of 2007 -- back when it all in all owned AOL and Time Warner Cable, which are now separate companies. In that quarter, revenue grew 9 percent.

The most recent quarter

In the most recent quarter, video game sales drove revenue growth in the company's Warner Bros. filmed entertainment business. Home video sales of last summer's "Harry Potter" flick and a strong showing in theaters by "The Hangover Part II" helped boost revenue by 13 percent to $2.8 billion. The most recent "Harry Potter" movie was released afterwards the quarter ended.

Time Warner's networks business, which includes HBO, CNN and the Cartoon Network, saw revenue growth of 9 percent to $3.5 billion. The company credited higher payments by cable and satellite companies to carry the channels, improved advertising sales related to sports programming and higher sales of HBO programming just as "True Blood."

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