Updated: Today, Time Warner, the conglomerate that includes movie studios, magazines, AOL and a cable company, reported sales of $12.3 billion for the fourth quarter and a $16 billion loss (thanks to a $24.1 billion impairment charge). A weak advertising climate dragged down AOL and the magazine division’s sales, and Time Warner Cable’s contributed more than $13 billion in impairment charges. Time Warner also confirmed that the cable company will be spun out this quarter — leaving Time Warner with content and no pipes.
Update: On the conference call, COO Landel Hobbs said Time Warner Cable also plans to expand its metered broadband to more cities this year. I’ve emailed the company get more details, such as the specific cities and if it will stick to its uncompetitive upper tier that offers a mere 40 GB per month before charging overage fees. In contrast, Comcast offers a 250 GB monthly cap and AT&T offers a 150 GB per month limit before charging fees.
Time Warner Cable also saw a loss of 84,000 “customer relationships.” It only added 124,000 broadband subscribers, compared with adding 214,000 in the third quarter of 2008 and 214,000 in the fourth quarter of 2007. It added 130,000 voice subscribers as well, bringing its total to 3.7 million voice customers and cutting further into the telco carriers’ core business. However, it saw a loss of 119,000 basic cable subscribers and a net add of 44,000 digital cable subscribers, as the poor economy or rising competition caused people to cut their cable bills. Total TWC revenue was $4.4 billion, up 8 percent from the same period last year.
Time Warner Cable was also the latest company to get hit by Clearwire’s declining share price: it wrote off $367 million of its $500 million investment in the WiMAX venture. That still seems too high a valuation, given that Time Warner Cable says it expects to roll out a wireless service with Clearwire in at least one city this year. I was expecting a faster roll out. Perhaps Clearwire will give us a clue as to it’s deployment plans when it reports results, expected later this month.