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 this year. Among the big gainers, CBS Corp is up 44 percent, Viacom Inc is up 22 percent and Time Warner Inc 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 and Viacom Inc.

As for spending by advertisers, he said, "We don't see a slowdown."

Advertising typically accounts for 30 to 70 percent of sales for major players such as Walt Disney Co, 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 said.

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 has gained 10 percent in 2011, outpacing a 2.75 percent rise in the broader S&P 500.


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 presidential election.

"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 Benchmark Company.

Beyond advertising, investors will look to see how much CBS and others are gaining from licensing deals with companies like Netflix Inc and Amazon.com Inc 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," Miller said.

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, 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 gain.

Time Warner and Viacom are projected to earn 56 cents a share and 85 cents a share, respectively.