TIME WARNER SALES UP; SHARES DOWN

Home video sales of Harry Potter and the Deathly Hallows: Part 1 helped lift Time Warner’s second-quarter results above analysts’ expectations. Although the company’s Warner Bros. division spent heavily on pre-release marketing and publicity for the the theatrical release of Part 2 — dropping its operating margin slightly below that of the year-ago quarter — overall sales by the film division were up 10 percent versus last year. The unit also was helped by solid ticket sales for the theatrical release of The Hangover Part II. In addition, Time Warner’s cable networks reported sales growth of 9 percent thanks to higher fees paid by cable and satellite companies and strong advertising sales principally for coverage of the NCAA tournament. Nevertheless, despite the strong earnings, Time Warner shares were down more than 4 percent at midday on Wednesday as the overall stock market experienced another bearish day.