BUDDY CAN YOU SPARE
A QUARTER?

Everybody loves a scapegoat. The Devil made me do it. It wasn't me, it was the alcohol. Even Time Warner has jumped on the blame bandwagon, reporting that second-quarter earnings fell because of higher interest rates.

Shares for the media giant have dropped about 3% since the company and America Online announced in January they would combine in a deal worth roughly $157 billion.

According to the average estimate of analysts surveyed by First Call/Thomson Financial, Time Warner earned eight cents a share in the quarter. Last year, it earned 12 cents a share before gains from cable-system swaps. Profit will decline partly because of higher interest expense and taxes, analysts said between bong hits on a typical Casual Friday in the financial district.

Time Warner's cash flow is expected to rise 7% to about $1.3 billion, including losses from digital media spending. Advertising revenues at Time Warner's cable networks and magazines, along with album sales from such acts as Kid Rock, matchbox twenty and Don Henley, bolstered results.

Time Warner said it expects to take a charge of $50 million in the second quarter related to a lost lawsuit regarding a theme park. Analysts also expect the company to take a charge of $400-450 million to reflect a change in film and television accounting.

Time Warner is expected to report results before U.S. markets open on Tuesday.