UPDATE 3-Time Warner vows CNN turnaround, ads disappoint

* Revenue falls 4 pct, misses Street view

* Adjusted earnings per share narrowly beat Street

* Cable ad revenue outpaced by NBC, Discovery

* Maintains earnings outlook for full year

* Sees ad revenue declines in Q3

By Liana B. Baker

Aug 1 (Reuters) - Time Warner Inc is unsatisfied with CNN's low ratings and will seek to turn around the cable news network with programming that is more compelling and stays non-partisan, the media company's Chief Executive Jeff Bewkes said on Wednesday.

Bewkes' comments, made after Time Warner reported better-than-expected earnings for the second quarter, come less than a week since the president of CNN Worldwide said he would step down. The CEO said CNN was the one exception to an otherwise strong cable-network unit, which increased quarterly revenues by 4 percent to $3.6 million.

"We are going to do a better job of putting on programming that will hold viewers," Bewkes said. "There is strong demand for objective, comprehensive, non-partisan coverage ... but we need to do it in a more compelling, more engaging way than we've been doing of late."

CNN, founded in 1980 and owned by Time Warner since 1996, has tried to hold the middle ground in its political news coverage, a position that some blame for its slip in viewership to historic lows in recent years.

Ratings have risen for competitors Fox News and MSNBC, which blend news with opinion and political commentary. The opinion programs on No. 1 cable news network Fox News skew conservative, while commentaries on MSNBC lean liberal.

Bewkes provided no update on the search for a new CNN chief.

Morningstar analyst Michael Corty said Time Warner appears to be aware of CNN's struggles and that the network may be able to reverse its fortunes.

"There is upside there. They are trying to address the issue through management changes and it is possible it could improve," Corty said.

ADS DISAPPOINT

Time Warner logged a 2 percent increase in advertising for its networks division, which includes TNT, TBS, HBO and CNN. This missed some analysts' expectations and lagged cable rivals.