November 14, 2008 / 12:45 PM / in 10 years

UPDATE 3-Canwest posts big loss on TV writedowns, shares sag

* Canwest loses C$1.02 billion, C$5.73 a share

* Writes down C$1.01 bln on goodwill, Canadian TV

* Shares fall 9 percent (Updated throughout; adds details comments)

By Wojtek Dabrowski

TORONTO, Nov 14 (Reuters) - Canwest Global Communications Corp CGS.TO posted a C$1 billion ($820 million) quarterly loss on Friday as it wrote down the goodwill and broadcast licenses related to its Canadian conventional television business, sending its shares down 9 percent.

The company said the non-cash writedown of C$1.01 billion reflects a “deterioration” in the near term profit expectations for the TV operations, in part because of the weak advertising market in Canada.

Leonard Asper, the company’s chief executive, also said the writedown is similar to moves undertaken by other media companies in response to the tough market environment.

“We have seen impairment charges such as these in other large media companies throughout North America,” Asper said. “The sooner we recognize the new reality, the faster we can recalibrate our business and move it forward.”

Canwest said it lost C$1.02 billion, or C$5.73 a share, in the three months ended Aug. 31. That was down from a profit of C$197.5 million, or C$1.11 a share a year earlier.

Its shares were down 7 Canadian cents, or about 9 percent, at 73 Canadian cents on the Toronto Stock Exchange. Last December they were worth C$7.50 each.

The company’s revenue grew to C$725.9 million from C$678.4 million a year earlier, thanks to last year’s acquisition of Alliance Atlantis Communications.

Canwest owns daily newspapers in every large urban market in Canada, as well as the Global television network. It also has TV operations in Australia through Network Ten.

Canwest partnered with an affiliate of U.S. investment bank Goldman Sachs (GS.N) to buy Alliance Atlantis, a specialty TV company, for C$2.3 billion.

The specialty channels are holding up well despite the tougher economic picture, Asper told analysts during a conference call.

“Digital and specialty channel revenue is good, strong, and publishing revenue is a little more challenging, and conventional (TV) is the really, real tough one.”

The Winnipeg, Manitoba-based company’s results came two days after it announced it would shed 560 jobs, or about 5 percent of its workforce, as its TV stations and newspapers slash costs to deal with an advertising downturn.

$1=$1.22 Canadian Reporting by Wojtek Dabrowski; editing by Rob Wilson

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