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 percent to $12.31 billion, below Wall Street expectations.
Quarterly operating profit at TW's film unit rose 7 percent despite an 11 percent revenue decline.
The TV unit showed opposing trends as operating profit declined 24 percent in the quarter despite a 9 percent revenue gain, driven by a 10 percent 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 percent 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.