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Tickers in this Article: TWX, NWS, DIS, LGF, TWC
After seeing their fortunes battered over the last year by the recession-induced slump in advertising, the giants of the media world appear to be back on track to strong profit growth, even though advertising markets haven't fully recovered.

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That's the take from the surprisingly strong earnings numbers recently released by Time Warner (NYSE: TWX) and rival News Corp. (Nasdaq: NWS). Both companies reported expectations beating earnings in their latest quarterly results, as better-than-expected box office receipts more than offset the ongoing slump in advertising revenues from traditional media assets.

Hollywood Still Figures Large In Fortunes
News Corp.'s innovative 3-D spectacular "Avatar" continues to smash box office records, recently crossing the $2 billion mark in global receipts. And Time Warner's Warner Bros. studio has managed to score some impressive numbers with hits like "Sherlock Holmes" and "The Hangover", the latter being a low-budget screwball comedy that won an unexpectedly huge audience by simply being unabashedly funny.

Finding the right formula for a winner flick can be elusive, however, as Disney (NYSE: DIS) may now be finding out. Its latest comedy effort, "When In Rome", got off to a weak start after an almost universal lambasting by the critics. Still, getting the chance to cash in on a "Titanic" sized blockbuster is still enough to keep investor interest in the media group high, despite the ongoing slump in advertising revenues.

Shareholders Still Rule At Time Warner
Breathing new life into some of Hollywood's past glories also lies behind the current bidding interest in the now debt-saddled carcass of once mighty MGM Studios. With more than 4,000 titles in its vault, MGM still has enough value to have garnered the attention of Time Warner and Lions Gate (NYSE: LGF). But now that Time Warner has upped its dividend by roughly 13 percent and committed itself to additional share buybacks, these cash commitments are a strong sign that the company isn't going to bid overly aggressively on MGM. It's also a sign that shareholder interests figure prominantly in the company's decision-making process. Stockholders had pressed hard for their share of the $9.25 billion in proceeds from last March's spinoff of Time Warner Cable (NYSE: TWC). (Find more information on spinoffs in our article Parents And Spinoffs.)

The Bottom Line
While Time Warner managed to underwhelm some investors with its fairly cautious guidance for 2010, some analysts are highly confident that the company can achieve double-digit earnings growth this year due to its strong film franchise and growing cable business. Even if the company does manage to underwhelm this year, shareholders could still stand to reap further cash windfalls as it returns more of its cash hoard to them.

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