TWX Time Warner Inc. New

Time Warner Inc. said Wednesday that it agreed to buy a 10% stake in streaming-TV service Hulu, a move that comes as traditional cable companies struggle with viewers increasingly cut the cord.

In addition, Time Warner also reported better-than-expected second-quarter earnings and lifted its profit forecast for the year.

Time Warner didn't disclose the terms of the Hulu deal. In November, The Wall Street Journal reported talks about Time Warner becoming an equal stakeholder in Hulu alongside Walt Disney Co., 21st Century Fox Inc. and Comcast Corp. The Journal reported then that such a deal would likely involve the current owners, who own one-third each, drawing down their stakes to 25%.

"The investment in Hulu reflects Time Warner's continued commitment to supporting innovative digital services that allow consumers to access high-quality content however they want it across a variety of platforms," Time Warner said Wednesday.

The New York-based Time Warner—owner of the Warner Bros. film studio and cable channels HBO, TNT and CNN—has been grappling with subscriber declines as more people cut the cable cord and opt for online streaming. In an effort to stem the tide, Time Warner last year launched HBO Now, its stand-alone streaming service for the channel featuring popular shows such as Game of Thrones.

21st Century Fox and News Corp, which owns The Wall Street Journal, share common ownership.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

August 03, 2016 08:15 ET (12:15 GMT)

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