Time Warner reports Q4 loss on writedown

Projects modest profit for 2009 of 66 cents per share

NEW YORK -- Time Warner and Time Warner Cable on Wednesday reported fourth-quarter losses on $24.2 billion in impairment writedowns to account for the lowered value of its assets that it had mentioned in a recent earnings warning.

TW, which expects to spin off TW Cable soon, also projected a 2009 profit for its remaining content businesses of 66 cents per share.

Meanwhile, TW Cable president and CEO Glenn Britt said -- in one of the most clearly worded such comments from a cable industry leader to date -- that his firm is feeling the effects of the recession, even though it performs better than many other businesses in this environment. "We aren't immune," he said in a conference call.

In one worrying development, momentum for premium services, such as DVRs, has continued to decline. Even pay TV subscribers declined in Q4.

Entertainment giant TW posted a fourth-quarter loss of $16.03 billion, compared with a year-ago profit of $1.03 billion. Revenue fell 2.7% to $12.31 billion, below Wall Street expectations.

Quarterly operating profit at TW's film unit rose 7% despite an 11% revenue decline.

The TV unit showed opposing trends as operating profit declined 24% in the quarter despite a 9% revenue gain, driven by a 10% ad revenue increase.

Meanwhile, TW Cable swung to a fourth-quarter loss of $8.2 billion, compared with a year-ago profit of $327 million. Revenue climbed 7.7% to $4.4 billion as management said momentum of subscriber gains slowed significantly.

In a conference call, TW Cable president and CEO Glenn Britt mentioned the recession and telecom competition as key drags on subscriber momentum.

He promised Wall Street observers a heightened cost focus, which will mean less frontline personnel, among other things. For now, the company wants to reach that goal via attrition rather than layoffs, he said.
comments powered by Disqus