Time Warner, the world’s largest media company, released its second quarter earnings on Wednesday, highlighting rapid revenue growth in its cable and network segments.

The New York-based company reported a net profit of $1 billion compared to a loss last year during the same quarter of $409 million. The earnings per share for the firm from April to June were 20 cents compared to a loss of 9 cents a year ago. Excluding a one time item charge, the earnings would be have been 24 cents, which is one cent better than predictions by analysts polled by Thomson Financial.

In the quarter, revenue rose 1 percent over the same period in 2005 to $10.7 billion, led by increased revenue at both the cable and network segment.

Subscriptions were boosted by significant growth in the digital phone sector, which grew to 1.6 million subscribers. The revenue for this segment increase 21 percent from $2.35 billion to $2.7 billion.

Offsetting the revenues rise was a slump recorded in other segments. In the company’s AOL division, revenues declined as membership to the network decreased by 3.1 million in the U.S. while for the Europe the decline was 571,000 people a year ago.

The filmed entertainment division suffered a drop of 10 percent in revenues as it found it hard to compete with home videos. The publication division revenues dropped 2 percent as subscription fell for the quarter.

Chairman and Chief Executive Officer Dick Parsons said: “We’re pleased with this quarter’s results, which put us firmly on track to achieve our full-year financial objectives,” he further about his delight in having free cash flow streaming into the company. “Especially significant was our generation of Free Cash Flow over the first half of the year, totaling more than $2.6 billion, or 49% of our Adjusted OIBDA.”

At existing price levels, the company was expected to purchase approximately $15 billion of its common stock by the end of 2006, and the remainder of its $20 billion program in 2007.