Time Warner raises profit outlook

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US media firm Time Warner has raised its full-year profit forecast after an improved performance at its film and cable network units.

The news is being seen as an encouraging sign for the recession-hit advertising market.

Time Warner's third-quarter net income fell 40% to $661m from $1bn a year earlier, partly due to lower ad sales at AOL and its magazines business.

But this was not as bad as analysts on Wall Street had been expecting.

Chief executive Jeff Bewkes said the firm was "on track to post solid results this year in spite of the tough economic environment".

Revenue rose at Time Warner's cable channels - which include HBO and CNN.

However, film studio Warner Bros, magazine publisher Time Inc and internet unit AOL all reported a fall in revenue.

In May this year, Time Warner said it would spin off AOL as a separate company. The split is expected to be completed by December.