November 27, 2009 / 4:44 PM / in 9 years

UPDATE 1-Canwest posts drop in revenue, operating profit

* Loss C$0.62 a share vs year earlier loss C$5.74

* Revenue drops C$624.4 mln vs C$720.6 mln

* Cites abrupt, unprecedented advertising revenue drop

TORONTO, Nov 27 (Reuters) - Canwest Global Communications Corp CGS.TOCGS.V posted a sharp drop in quarterly revenue and operating profit on Friday and said a weak advertising market continues to hurt the company as parts of it restructure under creditor protection.

Canwest, Canada’s biggest media company, said that its net loss was C$110.7 million ($104.4 million), or 62 Canadian cents a share, in the three months ended Aug. 31. That compared with a loss of C$1.02 billion, or C$5.74 a share, in the same period a year earlier, when it booked a big goodwill impairment charge.

Revenue dropped to C$624.4 million from C$720.6 million a year earlier. Operating profit fell to C$25.2 million from C$59.7 million.

Winnipeg, Manitoba-based Canwest owns Canada’s Global television network and a chain of daily newspapers anchored by the National Post.

Publishing revenue fell 20 percent in the quarter, while Canadian TV operations — including Canwest’s specialty-TV channels — had an 11 percent revenue drop, the company said.

“While the abrupt and unprecedented decline in advertising revenue had a significant impact on Canwest, most business units continued to perform better than the industry average, with online and specialty television reporting growth even in the face of the recession,” Canwest Chief Executive Leonard Asper said in a statement.

In October, Canwest announced that parts of the company — including Global TV and the Post — would file for bankruptcy protection. Canwest, which has about 7,400 employees, has been creaking under a debtload of about C$4 billion.

There has also been speculation that the protection filing could push the company to sell core assets, either to competitors or to private-equity investors, as it looks for ways to raise money to pay off its creditors. No deals have materialized thus far.

Canwest, like other media companies, has been hard hit as the recession choked off advertising revenues. The downturn has also prompted the company to slash costs, with 560 layoffs announced in November 2008.

$1=$1.06 Canadian Reporting by Wojtek Dabrowski; editing by Peter Galloway; +1-416-941-8009; Reuters Messaging:

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