Time Warner reports raised profit outlook

US media firm Time Warner posted higher-than-expected quarterly profit and has raised its full-year profit forecast after an improved performance at its film and cable network units. ┬á The news is being seen as a good sign for the recession-hit advertising market, that advertising sales at cable networks such as TNT are recovering, and that cost-cutting at the Warner Bros film studio is paying off.┬á Time Warner's third-quarter net income fell 40 percent to $661 million from $1 billion a year earlier, partly due to lower ad sales at AOL and its magazines business, but this was not as bad as Wall Street analysts had been expecting.┬á Chief executive Jeff Bewkes said the firm was "on track to post solid results this year in spite of the tough economic environment". ┬á Bewkes wants to concentrate on one big businessÔÇö creating content. He has also taken costs very seriously, a strategy that is reinforcing results and encouraging investors, who have driven the stock up by about a third in the last six months.┬á Analysts praised the efforts of Time Warner's to cut back on expenses, especially at Warner Bros. Collins Stewart analyst Thomas Eagan called the film division's results "standout."┬á┬á Another analyst, Caris & Co's David Miller, said, "Cost containment has been thematic to the Jeff Bewkes regime. He demonstrated this hawkish ability to keep an eye on costs once again."┬á This week, a rush of results from media companies with cable properties, such as Discovery Communications Inc and Viacom Inc, are finding their footing more quickly as the economy begins to improve. ItÔÇÖs a clear pattern that ad sales and distribution revenue for cable networks are showing signs of life.┬á At Time Warner's cable networks, including Turner and HBO, revenue rose to $2.87 billion from $2.73 billion, and subscription revenue rose 9 percent. Advertising sales fell, but only 1 percent, a bright sign for the worn out media industry.