Time Warner Inc. (TW), the world's largest media company, Wednesday said fourth-quarter profit rose more than 20 percent on strong growth in advanced cable services and feature films.

The company also gave an earnings outlook roughly in line with Wall Street expectations.

Time Warner shares were up 43 cents, or 2.45 percent, to $17.96 on the New York Stock Exchange.

Profit increased to $1.4 billion, or 29 cents per share, from $1.13 billion, or 24 cents per share, a year earlier, beating analysts' forecasts of 21 cents, according to Reuters Estimates.

The owner of Warner Bros. film studio, AOL and CNN said revenue rose 7 percent to $11.9 billion.

"I thought the results were pretty good," said Thomas Eagan, vice president of Oppenheimer research. "They were (generally) in line with our expectations, with cable outperforming our estimates on all fronts."

Revenue at Time Warner Cable rose 13 percent, and operating income before items increased 11 percent.

The company's basic video subscriber base grew by 34,000 from the third quarter to end the year at about 11 million.

Time Warner Cable added 265,000 residential high-speed Internet subscribers and 246,000 digital phone subscribers.

Revenue at the AOL online division fell 8 percent as it lost 625,000 subscribers in the quarter.

In December, Internet giant Google Inc. (GOOG) agreed to purchase a 5 percent stake worth $1 billion in the division and to strike a broad ranging advertising partnership. Time Warner expects the deal to close in the first quarter.

Movies revenue rose 11 percent, and profit increased 42 percent, boosted by the box office success of the latest Harry Potter film and DVD sales of "Batman Begins" and "Charlie and the Chocolate Factory".

Time Warner's adjusted operating income before depreciation and amortization, a closely tracked performance metric, rose 18 percent to $2.9 billion.

The company faces a proxy battle by a group of investors led by activist shareholder Carl Icahn, which collectively owns about 3 percent of the stock.

Time Warner stock, like much of the media sector, has suffered from looming competition from the Internet, and decelerating DVD sales growth. Shares have trailed the S&P 500 index by 12 percent over the past year.

The stock trades at 8.35 times estimated 2006 earnings before interest, tax, depreciation and amortization, compared with multiples of 9 for Walt Disney Co. (DIS) and 10.5 for the new Viacom Inc. (VIA).

Looking ahead Time Warner said it expected full-year 2006 growth in adjusted operating income before depreciation and amortization to be in the high-single digits percentage range, off a base of $10.3 billion in 2005.

"The guidance was very much in line with consensus expectations," Pali Research analyst Richard Greenfield said. "The real question will be if (the outlook) is conservative and the company can actually achieve double-digit growth or not."