| NEW YORK
NEW YORK Time Warner Inc raised its full year outlook after quarterly revenue rose on strength at its cable network division, though it was unclear if the advertising recovery will sustain its momentum next year.
The company, whose shares were down 1.5 percent in early trade, reported on Wednesday third-quarter revenue of $6.38 billion slightly below analysts average revenue forecast of $6.41 billion, according to Thomson Reuters I/B/E/S.
Networks such as CNN, HBO and TNT have helped Time Warner thrive during the recession. But analysts are worried that this year's recovery in advertising will stall.
"The economy has stabilized but it is growing at a snail's pace," said Fred Moran, an analyst at the Benchmark Company about the outlook for 2011. "Advertising will reflect that."
Time Warner expects its profit excluding one time items to rise in the high 20-percent range, up from its previous forecast of at least 20 percent.
"Advertising looks extremely strong right now," said Alan Gould, an analyst with Evercore Partners. "In terms of what happens next is going to be a function of the economy."
At the company's cable networks division, revenue rose 9 percent to $3 billion on a 10 percent gain in advertising revenue on international expansion and higher pricing for last minute purchases of television spots.
Despite the advertising growth, Time Warner noted that the rise was offset by lower ratings at its United States news networks, such as CNN.
Even advertising revenue at the hard-hit publishing division, which includes Time and People magazines, rose 5 percent, which could not offset a subscription revenue decline of 5 percent.
Filmed entertainment revenue from Warner Bros was flat at $2.8 billion despite strong box office sales of "Inception" as it was overshadowed by the releases of "Harry Potter and the Half-Blood Prince" and "The Hangover" a year ago.
Net income at the media conglomerate fell to $522 million, or 46 cents per share, from $662 million, or 55 cents a share, a year ago when it owned AOL.
Excluding items, Time Warner earned 62 cents per share beating analysts expectations of 53 cents per share.
Its shares were down 50 cents, or 1.5 percent, at $31.91 on the New York Stock Exchange.
(Reporting by Jennifer Saba; Editing by Derek Caney)