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Time Warner beats Street
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July 14, 1999: 4:25 p.m. ET
Realigning cable biz, CNNfn parent tops analyst targets, but revenue falls
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NEW YORK (CNNfn) - Time Warner Inc. topped analyst targets even as revenue fell in the second quarter, as the media company realigned its cable business and chalked up box-office successes like "The Matrix" and the latest "Austin Powers" film.
The New York-based company, the parent of CNNfn, earned $593 million, or 46 cents per diluted share in the quarter ended June 30, up from $101 million, or 2 cents, a year ago.
The results included $771 million in gains in the second quarter of 1999 connected with the sale or swap of cable systems. The company also launched an initial public offering for 20 percent of its Time Warner Telecom unit. Excluding such one-time items, the company earned 12 cents a share.
The consensus estimate of analysts was for the company to post income of 6 cents a share, according to First Call Corp. Revenue fell three percent to $3.6 billion.
Investing in cyberspace
Gerald Levin, Time Warner's chairman and chief executive, said the company's music business will be the biggest beneficiary of the Internet, adding the company will invest in its cyberspace properties.
"We are going to use our capital to invest in our own development of digital businesses," Levin said at a news conference Wednesday.
Elsewhere, the upstart Warner Bros. Network posted an operating loss of $30 million, up from a loss of $23 million in the year ago period.
Levin told reporters the WB network will be in the black for the Sept 2000 season.
The company's cable networks and filmed entertainment division both produced solid gains.
Levin also said Time Warner expects to gain complete control of the WB studios and Home Box Office once AT&T completes the purchase of Media One Group.
Time Warner owns almost 75 percent of HBO and Warner Brothers in a partnership with MediaOne called Time Warner Entertainment, which also includes most of Time Warner's cable systems. AT&T will get a 25.5 percent stake in the venture once it completes its proposed purchase of MediaOne.
Time Warner said improved theatrical results stemmed from futuristic action film "The Matrix," with $307 million in box-office revenues, and "Austin Powers: The Spy Who Shagged Me," tallying $184 million at the box office since its June 12 release.
Shares of Time Warner (TWX) added 1-5/8 to 77-3/8 on the New York Stock Exchange Wednesday. 
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Time Warner
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