From Variety
Time Warner, still saddled with troubled assets such as cable systems, print publishing and AOL, reported a net loss of $16 billion for the fourth quarter Wednesday.
That compares with a $1 billion profit in the year-earlier period.
The source of the massive hit was a $24.2 billion writedown of the value of franchise agreements belonging to Time Warner Cable (of which it owns 84%) and the decline of certain Time Inc. and AOL assets.
Revenue on the film side in the quarter ended Dec. 31 dropped 11% to $3.1 billion but operating profit rose 6% due to a reduced release output and a higher B.O. batting average.
The quarter's theatrical titles, such as "Gran Torino," "Four Christmases" and "Yes Man," were roughly even with the year-earlier crop of "I Am Legend," "Fred Claus" and ""The Golden Compass."
On the homevid front, even a juggernaut such as "The Dark Knight" suffered due to overall DVD softness, which execs said will linger as long as overall retail numbers are down. In a dramatic illustration of the decay of the DVD market, execs said sales of TV titles declined 24%.
The conglom already prepared Wall Streeters for the big fourth quarter loss in January, when it announcing the $24.2 billion writedown. In revised guidance issued along with the results Wednesday, execs forecast flat results for 2009 compared with 2008, with three straight quarters of earnings decline followed by a final quarter of growth.
Chief financial officer John Martin noted that all forecasts to date have not taken into account plans to effect a reverse stock split upon completion of the cable separation.
Time Warner said a planned decoupling from Time Warner Cable and a disposition of its stake was proceeding and should close some time in the current quarter. That transaction will net $9.25 billion in a one-time dividend and prevent future writedowns as cablers face intense pressure due to the country's real estate and economic woes.
Shares edged down almost 4% to close at $9.42 -- above the 52-week low of $7 but far from the $16 levels of last summer.
Total revenue eased down 3% to $12.3 billion.
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