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Last Updated: Thursday, 5 May, 2005, 06:47 GMT 07:47 UK
Time Warner buoyed by cable unit
Screen grab showing Time Warner's Road Runner high speed cable internet service
Time Warner wants to offer clients a multimedia package via cable
Time Warner, the world's largest media firm, has reported a small rise in profits as growth at its cable business offset a slide at America Online (AOL).

Net income was $963m (505m) compared with $961m a year earlier in the first quarter. Sales added 3% to $10.5bn.

An increasing number of subscribers are being lured by services like high-speed internet, digital TV and phone calls.

The company is focusing on cable and its shares climbed 3.6% to $17.28 in New York on Wednesday.

AOL is still losing subscribers but is managing to attract more advertisers, helping stem the slide in earnings.

Sales at AOL in the quarter dipped by 3% and its subscriber base shrank by 549,000. However, advertising revenues were up by 45% and the division turn a profit.

Fast-streaming profits?

The cable business posted growth of 10% in the quarter, the biggest gain at any of Time Warner's units.

The company added 152,000 phone customers in the quarter, a performance that was called "awesome" by Prudential Securities analyst Kathy Styponias.

Time Warner now has 372,000 digital phone customers - about 3% of its total customer base - giving it plenty of room to grow, analysts said.

The company said last week that it was joining forces with Comcast in order to buy 5.3 million cable subscribers from bankrupt Adelphia Communications.

Chief financial officer Wayne Pace said that earnings in the current quarter would get a boost from the company's sale of its $940m stake in internet search engine Google.

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