BREAKING NEWS & VIEWS

Time Warner's 1% Year
Thursday, January 8, 2009
Steve Smith

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Just two months ago Time Warner expected to see 5% growth in operating income during a distressed 2008, but yesterday the company warned it was looking at a mere 1% growth for the year. The company is booking a number of charges, totaling between $370 million and $380 million, that are helping to lower the estimate. Nevertheless, “the economic environment has proved somewhat more challenging than the company previously expected, particularly for the advertising businesses at the AOL and publishing segments,” TW said in a statement. Overall, TW is expecting to post a loss for the year.

Time Warner CFO John Martin told the Citigroup Global Entertainment, Media & Telecommunications Conference yesterday that the magazine industry still is faring better than the abysmal newspaper industry because almost all Americans continue to read magazines. Still, he told attendees that TW's recent reorganization of the publishing unit around key verticals reduced the workforce by 7%. Magazine ad sales still were “trending down 20% in Q3.” AOL continues to be a major challenge because it does not have the scale of some of its competitors in the portal and content space during a time when media buyers will tend to look for top-line reach when allocating money. Martin said that Time Warner continues to look for strategic alternatives and alliances to increase AOL’s reach.

If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com


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