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Watching Time Warner 2Q profit before spinoff

LOS ANGELES (AP) -- Time Warner Inc., owner of HBO, CNN, and Warner Bros., reports its second-quarter earnings before the market opens on Wednesday as the company prepares to spin off its ailing Time Inc. magazine unit by the end of the year.

WHAT TO WATCH FOR: Fresh details on the separation of Time Inc., including timing and strategy. In July, the company hired back former Time executive Joseph Ripp to be Time's new CEO, starting in September. Shedding Time Inc. is expected to help investors focus on Time Warner's faster-growing TV and movie businesses.

Analysts expect Time Warner to report growth in TV advertising revenue due to better audience ratings. The fees Time Warner receives from distributors — cable providers and telecommunications companies — are also expected to get a boost next year as the company begins a round of new negotiations for channels such as TBS and TNT.

Movie studio revenue at Warner Bros. is also forecast to grow, thanks in part to "Man of Steel," the Superman reboot that has reaped some $650 million in ticket sales since its premiere in mid-June. Executives may address the loss of partner producer Legendary Entertainment to Comcast's Universal Pictures last month.

WHY IT MATTERS: Time Warner is one of the world's largest media companies. Its stated strategy of providing "TV Everywhere" is a defense against consumers cutting pay-TV subscriptions in favor of cheaper alternatives such as Netflix, which don't provide live programming or sports games. Its actions affect everyone who interacts with its content.

WHAT'S EXPECTED: Analysts polled by FactSet expect Time Warner to post earnings of 76 cents per share, excluding one-time items, on revenue of $7.11 billion.

LAST YEAR'S QUARTER: Time Warner posted adjusted earnings of 59 cents per share on revenue of $6.74 billion.