NEW YORK (CNNMoney.com) -- Time Warner Inc. posted a second-quarter profit Wednesday that rose from a year ago and beat Wall Street's expectations. It also boosted its full-year outlook.
The New York-based parent company of CNNMoney.com and Fortune said its net income rose to $562 million, or 49 cents pare share, up 7.2% from a year ago.
Adjusted operating income, a commonly used profit metric for media companies, rose 15% to $1.2 billion, or 50 cents per share. Analysts polled by Thomson Reuters were looking for earnings of 45 cents per share.
During a conference call with analysts, Time Warner chief executive Jeff Bewkes said the earnings growth was thanks to "an improved ad environment and continued cost controls."
The media conglomerate's revenue increased at its highest rate in two years, Bewkes said, as advertising sales rose 11% during the quarter, and its film and television divisions delivered strong performances.
Investors welcomed the news, as the company's shares rose nearly 1% in late morning trading.
"Time Warner delivered a nice, clean beat for the quarter, and there's not much negative," said David Bank, analyst at RBC Capital Markets. "Demand is coming back on the advertising front more strongly than we expected."
Revenue rose 11% at the company's television networks, which include CNN, HBO and other Turner stations. Sales were boosted by a 9% rise in cable subscriptions and a 14% increase in advertising revenues, which Bewkes said is the highest increase in years.
Revenue at Warner Bros., the company's filmed entertainment segment, climbed 8%, led by the box office performance of "Clash of the Titans" and "Sex and the City 2," the company said. But the division's operating profit slipped 2%, as sales were offset by higher production and advertising costs.
The steeper costs during the quarter were likely due to marketing for Warner Bros.' latest theatric hit "Inception," said Miller Tabak & Co. analyst David Joyce. He expects that the movie's success will help the company post strong results for the third quarter.
Revenue at Time Warner's publishing division, Time Inc., was virtually unchanged, despite a 4% increase in advertising sales. Overall revenue failed to grow primarily due to flat subscription growth and an ongoing impact from the sale of Southern Living at Home last fall.
But due to substantial reductions in cost, including lower pension expenses, the publishing unit's operating profit surged 50%.
Time Warner Chief Financial Officer John Martin said during the call that magazine subscriptions will likely remain under pressure during the second half of the year, but costs will continue to be lower than a year ago.
For the full year, the media giant said it expects earnings to be up at least 20% from $1.83 per share earned in 2009. Last quarter, the company said it expected growth to be "at least in the mid-teens."
Time Warner has been refocusing its businesses for the past couple of years. It spun off Time Warner Cable (TWC, Fortune 500) and the underperforming online company AOL (AOL), which reported a $1.1 billion loss for the second quarter Wednesday.
News Corp. (NWSA), which reports after the market closes Wednesday and Viacom (VIAB, Fortune 500), which reports Thursday, are also expected to post higher profits compared to a year ago. Walt Disney Co. (DIS, Fortune 500) results are due next week, and it too is also forecast to deliver an increase in earnings.
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