Q1 Earnings Results Could Mean Gloomy Upfronts
Big Job Cuts Coming to Time Warner Cable
Time Warner reported an operating loss of $16 billion today following declines in filmed entertainment, publishing and AOL. Early in January the media conglomerate wrote down the value of its assets by $24.2 billion.
Despite the poor economic environment, the company's television networks which include Turner Broadcasting and HBO, bucked a trend and showed a slight growth for the year. Advertising revenue was up 10% for 2008 and 7% in the fourth quarter. For the full year operating income at the segment was up 3% to $3.1 billion while revenue was up 9% $11.2 billion.
Time Warner chief financial officer, John Martin, said today that he expected advertising revenue at its networks division to be flat going forward. "That wouldn't be a bad result," he said. Last year advertising revenue rose on a strong performance from CNN which benefited from political spending and at TBS thanks to Major League Baseball and overall ratings improvement. Profit was affected by a legal judgment against Turner, which is being appealed. Martin didn't give much detail about performance in the second quarter 2009. "Visibility is limited for the rest of 2009; we expect to outpace the industry in terms of advertising performance," said Martin.
Martin added that HBO had had, "a great year with double digit growth and its highest subscriber number ever." The closure of HBO Latin America would help the pay-TV operator continue to post gains. Programming expenses for the segment grew by 8% to $3.9 billion, in part because of NBA rights.
Time Warner unit, AOL, has had a turbulent year with revenue dropping 20% to $4.2 billion on subscriber and advertising declines. Advertising revenue was down $135 million in 2008 or 6%. Company Chairman and CEO Jeff Bewkes said the company was still examining a few options for AOL's future, including a combination with an outside company or a spin-off,. He declined to tie himself to a time line on when that might occur.
Time Warner's fourth quarter revenue declined 3% to $12.3 billion and for the full year grew 1% over 2008 to $47 billion.
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