Time Warner Posts $16 Billion Loss (Update)

The media company swung to a fourth-quarter loss because of a write-off of $24.2 billion and guided below Wall Street's expectations for 2009.
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Updated from 6:40 a.m. EST

Time Warner

(TWX)

on Wednesday swung to a fourth-quarter loss because of a massive writeoff and offered a glum picture for 2009.

The media company posted a loss of $16 billion, or $4.47 a share, compared with a profit of $1 billion, or 28 cents a share, in the year-earlier period. Excluding one-time items, including a $24.2 billion impairment charge, Time Warner earned 23 cents a share in the quarter, falling short of consensus analyst estimates of 26 cents a share as gathered by Thomson Reuters.

One month ago, Time Warner warned that it would take a noncash impairment charge related to goodwill and intangible assets in the fourth quarter of about $25 billion before taxes. The charge stems from the company's cable, publishing and

AOL

segments.

One week ago,

Time Warner said that it would lay off 10%

, or 700 people, from its AOL division.

Total revenue slipped 3% from a year ago to $12.3 billion, as declines in Time Warner's filmed entertainment, AOL, and publishing units were offset only partially by gains in its cable and networks businesses. Analysts had forecast revenue of $12.71 billion.

"Operationally, we'll continue to improve the efficiency of our businesses while creating even more of the compelling content that's becoming increasingly valuable," said CEO Jeff Bewkes. "At the same time, we'll strengthen our balance sheet, improve our strategic flexibility and return capital to our stockholders on a consistent basis. Through these steps, we expect to emerge from this downturn in an even stronger competitive position."

For 2008, Time Warner said revenue grew 1% to $46.98 billion, compared with Wall Street's target of $47.42 billion. Adjusted earnings totaled 99 cents a share, compared with forecasts of a full-year profit of $1.03 a share.

The company also guided below expectations for 2009. Time Warner said it should see full-year earnings from continuing operations that are roughly flat with 2008, excluding its

Time Warner Cable

(TWC)

operations. The outlook reflects the impact of about $250 million in restructuring charges related to AOL and Warner Bros.

Analysts currently expect Time Warner to post full-year earnings of 99 cents a share, according to Thomson Reuters, although estimates likely include cable operations results.

Time Warner Cable, meanwhile, said it swung to a fourth-quarter net loss of $8.16 billion, or $8.36 a share, compared with a profit of $327 million, or 33 cents a share, in the year-ago period. Excluding its $14.82 billion share of Time Warner's writedown, earnings were 35 cents.

Revenue rose 7.7% from a year earlier to $4.4 billion, as Time Warner Cable saw a 175,000 net addition in revenue generating units during the quarter.

Analysts were expecting earnings of 32 cents on revenue of $4.41 billion.

Time Warner Cable, in which Time Warner owns more than an 80% stake, is expected to be completely split from the company in the near future. "Structurally, we'll complete the Time Warner Cable separation soon," Bewkes said in a release.

Time Warner shares were falling 1.5% to $9.63. Time Warner Cable was up 3% at $18.91.