Turner and HBO drive Time Warner profit up

Time Warner Inc. said its profit grew by 44% in the third quarter while revenue remained flat.

The media giant, whose holdings include Warner Bros., HBO and Turner Broadcasting, posted profit of $1.18 billion thanks to its cable unit as well as reduced programming costs and gains from an acquisition. Revenue for the quarter was $6.9 billion.

Time Warner’s cable unit, particularly the Turner networks (TNT, TBS, TruTV) had a strong quarter, with revenue increasing by 5% to $3.8 billion thanks to increases in advertising and subscription fees. Time Warner Chief Executive Jeff Bewkes also noted that Turner had recently completed a new distribution deal with Verizon as well. HBO also continues to have strong international growth.

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Beefing up subscription fees for the Turner networks has been a priority for Time Warner and has helped push Time Warner’s stock up more than 40% in the last year.

Although CNN’s ratings have been in a tailspin in recent weeks, Bewkes spoke confidently about new chief Jeff Zucker’s plans to reinvigorate the network by creating more original programming and being less dependent on breaking news stories.

At Warner Bros., revenue fell 7% to $2.7 billion. Although “We’re the Millers” and “The Conjuring” were solid results, it paled in comparison to the same period a year ago which included “The Dark Knight Rises.” The studio also got a boost from revenue generated by reruns of the sitcom “The Middle.”

However, Bewkes said the studio is on pace for a record year thanks to “Gravity” and the upcoming “The Hobbit: Desolation of Smaug,” which is expected to do blockbuster numbers worldwide.

At Time Inc., the publishing unit that is home to Time, People and other titles, revenues fell 2% to $818 million. Time Warner is in the process of spinning off Time Inc. into a separate stand-alone company early next year.

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Follow Joe Flint on Twitter @JBFlint.