Time Warner Inc. (TWX) reported earnings that were so dreadful that they defy the imagination.
The largest media conglomerate lost $16 billion in period ended Dec. 31 as it wrote down the value of the assets its overpaid for and coped with plunging advertising sales. Baring an economic miracle, it’s hard to see how things will improve this year. I don’t see how Chief Executive Jeffrey Bewkes can survive following Time Warner’s first loss in 14 quarters.
Gains in the cable business failed to offset weaknesses in other divisions. For example, AOL revenue plunged 20% to $4.2 billion. Advertising, which is supposed to be the savior of the portal, declined 6 percent. Subscription revenue was off 31 percent as the company exited that business.
Warner Bros. was particularly weak as titles such as "Sex and the City" failed to attract nearly the box office of the previous year’s hit "Harry Potter and the Order of the Phoenix." Revenue in Filmed Entertainment is down 2% to $11.4 billion.
Time Inc, the magazine division, continues to generate lackluster results. Calls to divest the parent of People magazine are only going to grow louder. Revenue fell 7% to $4.6 billion.
With results like these, Bewkes does not need to pull a rabbit out of a hat. He will need a whole magic show to save his job.
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