UPDATE 5-Time Warner profit beats estimates, outlook raised

* Q3 adj EPS 61 cents vs Street forecast 53 cents

* Q3 rev $7.1 billion vs Street forecast $7.1 bln

* Raises 2009 EPS outlook to at least $2.05

* Shares up 0.9 percent (Adds analyst comment, division details)

By Paul Thomasch

NEW YORK, Nov 4 (Reuters) - Time Warner Inc (TWX.N: Quote, Profile, Research) posted a higher-than-expected quarterly profit and raised its full-year earnings forecast, in a sign that advertising sales at cable networks such as TNT are recovering and that cost-cutting at the Warner Bros film studio is paying off.

The surprising results -- earnings per share beat analyst forecasts by about 15 percent -- come during a major repositioning at Time Warner, which has spun off Time Warner Cable Inc (TWC.N: Quote, Profile, Research) and will spin off Internet operation AOL in December.

Time Warner shares rose slightly after the report, which showed AOL and the Time Inc magazine division as the main drags during the quarter. Overall profit, while better-than-expected, fell 38 percent.

Third-quarter net income fell to $661 million, or 55 cents a share, from $1.07 billion, or 89 cents a share, a year before. Adjusted profit was 61 cents a share, compared with the 53 cents analysts had expected, according to Thomson Reuters I/B/E/S.