Time Warner beat Wall Street's expectations for its third quarter results, it reported this morning. But investors will likely focus instead on its lowered guidance.

The bad advertising environment caught up with Time Warner (NYSE:TWX) in a flash. Viacom (NYSE:VIA) had only just indicated that the market for advertising sales were dismal. Now TWX is slashing its forecasts.

Time Warner expects to incur certain restructuring charges this year. For the nine months ended September 30, 2008, the firm has incurred approximately $182 million in charges which will impact EPS forecasts.

Time Warner said it full-year growth rate in adjusted operating income before depreciation and amortization will be around 5%, off a base of $12.9 billion in 2007. This compares to the outlook provided on February 6, 2008 of a range of 7% to 9% growth. It also cut cash flow projections.

On the earnings side, Time Warner said EPS will be in the range of $1.04 to $1.07. This compares to the firm's prior outlook of $1.07 to $1.11.

For the third quarter, revenue rose a fraction to $11.7 billion. Operating income was also up modestly to $2.4 billion.

The only units with strong performances were the company's cable and network operations. Cable revenue was up almost 10% to $4.3 billion. Networks rose about 5% to $2.7 billion.

Magazine publishing and AOL did poorly and both are in the advertising sector, which could get much worse. Advertising revenue for most print and online business was hurt in Q3, but a number of analysts expect it do do even worse in Q4. Even now, the TWX forecast may be too rosy.

AOL operating income fell from $295 million last year to $268 million. Magazine publishing operating income dropped from $251 million to $162 million.

With cable results at competitors like Comcast (NASDAQ:CMCSA) showing some weakness, Time Warner is running out of businesses that do well

Douglas A. McIntyre is an editor at 247wallst.com.