UPDATE 2-Spain's Prisa Q1 net up, backed by advertising

(adds analysts)

By Elisabeth O'Leary

MADRID, April 17 (Reuters) - Spanish media firm Prisa (PRS.MC) posted a 4.1 percent rise in first quarter net profit on Thursday in line with expectations and backed by strong advertising revenues, with TV compensating for weak ad income at older media units.

Analysts warned that the results were perhaps not as strong as at first appeared, with declining margins at key businesses such as flagship newspaper El Pais.

Many investors are on hold until the results of the company's buy-out bid for TV unit Sogecable SGCE.MC come out next month. Prisa holds a conference call on Monday at which more details are expected.

"Shares will probably not do much until we know how the takeover bid has gone, with many people expecting that their debt levels will rise to finance the bid," said Virginia Perez, analyst at Ahorro Corporacion Financiera.

First-quarter net profit came in at 25.2 million euros ($40.2 million) against an average forecast of 25.6 million euros in a Reuters survey of five analysts.

EBITDA (earnings before interest, taxes, depreciation and amortisation) rose 11.2 percent to 172.3 million euros, just ahead of expectations of 168 million euros.

Revenues rose 7.2 percent to 958.4 million euros against the survey average of 946.5 million euros.

Within that, closely-watched ad revenues were up 7.4 percent, although comparisons were distorted by the March election and the fact that Easter fell in the first quarter in 2008 and in the second quarter of 2007.

PRESS SLOWDOWN

The strong ad performance was due to robust growth at TV arm Sogecable SGCE.MC which offset a decline in publicity revenues at Prisa's press interests, where they dropped 9.6 percent.

"While we believe there is a noticeable effect coming from the Easter and national elections in March, these numbers seem very weak overall to us," said a second analyst who requested anonymity.

Newspaper and magazine sales overall were up 7.4 percent, with El Pais increasing its circulation and its Sunday cover price, while educational text unit Santillana increased revenues by 17.4 percent.

Free-to-air channel Cuatro continued to stride ahead, with average audience share hitting 8.7 percent in March.

Prisa increased its stake in Sogecable to just over 50 percent in December, triggering an obligatory takeover bid under Spanish law. It has offered 28 euros a share, valuing the TV firm at 3.85 billion euros.

With stock markets having slid substantially since then, analysts say Prisa's offer will be much more popular than it expected, forcing it to fund the purchase of about 80 percent of Sogecable's shares with more debt, adding to the current debt load of 3.15 billion euros. (Reporting by Elisabeth O'Leary; editing by Rory Channing)