* Results due from CBS, Time Warner, Disney in next 2 weeks
* Revenue for big media seen up 4-7 pct
* Comcast revenue forecast to jump 45 pct post-NBC deal
* Advertising rebound expected to carry on
By Lisa Richwine
LOS ANGELES, Aug 1 U.S. media giants are set to
report quarterly revenue gains on the back of a booming
advertising market that shows little sign of retreating.
Thanks largely to the strongest advertising spending in
years, investors have flocked to media stocks, which have far
outperformed the Standard & Poor's 500 .SPX this year. Among
the big gainers, CBS Corp (CBS.N) is up 44 percent, Viacom Inc
VIAb.N is up 22 percent and Time Warner Inc (TWX.N) has
climbed 9 percent.
Industry analysts and investors see more healthy quarters
ahead despite questions surrounding the overall U.S. economy.
"There is some uncertainty out there in terms of the
macroenvironment, but we're not hearing it from the management
teams that we speak to," said John Miller, a portfolio manager
at Ariel Investments, which holds shares of CBS Corp (CBS.N)
and Viacom Inc VIAb.N.
As for spending by advertisers, he said, "We don't see a
Advertising typically accounts for 30 to 70 percent of
sales for major players such as Walt Disney Co (DIS.N), CBS and
Time Warner -- companies that report quarterly results over the
next two weeks.
Projected revenue increases vary by company, with CBS set
to gain 7 percent, Time Warner 7 percent and Disney 4.5
percent, according to Thomson Reuters I/B/E/S.
After plunging with the economy in 2008, ad money is now
flowing to broadcast and cable television networks as well as
digital platforms such as social media and online video, said
Brad Adgate, an analyst at advertising firm Horizon Media.
The new spending is driven partly by strong sales for autos
and new technology such as tablet computers, plus optimism that
the economy is improving and consumer spending will rise, he
Rate increases seen in this year's upfronts -- the
television ad sales completed months before the fall season --
ranked among the strongest in eight years, Adgate said. Big
spenders in the market include automakers and communications
providers. That should help boost the media giants.
"One of the bright spots (in the economy) has been the
advertising marketplace. Earnings reports have been very strong
for these media companies. I would suspect that would
continue," he said.
The Standard & Poor's media index .GSPME has gained 10
percent in 2011, outpacing a 2.75 percent rise in the broader
Weak output and high unemployment have raised doubts about
the U.S. economy's recovery from recession. A slowdown could
cause marketers to pull back their spending over fears
consumers will tighten their wallets.
At the moment, media-watchers remain optimistic that TV
advertising will hold strong in the coming quarters with a
boost from spending on political ads heading in to next year's
"So far there are no signs of moderation as we start the
second half of the year despite hints of the economy softening
somewhat. You would need to see a more material change to
interrupt" that trend, said Fred Moran, an analyst at The
Beyond advertising, investors will look to see how much CBS
and others are gaining from licensing deals with companies like
Netflix Inc (NFLX.O) and Amazon.com Inc (AMZN.O) to stream TV
shows and movies over the Internet.
Those tie-ups are a new source of revenue for content
providers as viewing habits shift from traditional television
to mobile devices and Internet-connected TVs. "There's really
no cost to that. It pretty much drops to the bottom line,"
For the just-completed quarter, analysts expect Disney to
post earnings of 73 cents a share on revenue of $10.5 billion,
according to Thomson Reuters I/B/E/S. CBS is expected to earn
45 cents a share on revenue of $3.6 billion.
Cable operator Comcast Corp (CMCSA.O), which now holds a
controlling interest in NBC Universal, is expected to earn 41
cents a share with revenue of $13.8 billion, a 45 percent
Time Warner and Viacom are projected to earn 56 cents a
share and 85 cents a share, respectively.
(Reporting by Lisa Richwine, Editing by Paul Thomasch and