January 10, 2008 / 5:15 PM / in 10 years

CanWest profit dips, warns of writers' strike impact

TORONTO (Reuters) - CanWest Global Communications Corp CGS.TO, Canada’s biggest media company, reported a lower first-quarter profit on Thursday despite higher revenue as foreign currency swap losses, restructuring expenses and higher interest costs hurt results.

The company also said the performance of its conventional TV channels will be affected by the ongoing Hollywood writers’ strike, but that the impact should be reduced by the upcoming launch of new reality-TV shows, such as Survivor and the Celebrity Apprentice.

CanWest, which owns Canada’s Global television network and a national chain of daily newspapers, said it earned C$41 million ($40.6 million), or 23 Canadian cents a share, in the three months ended November 30. That was down from a profit of C$66 million, or 37 Canadian cents a share, in the same period a year earlier.

The Winnipeg, Manitoba-based company said consolidated revenue rose 8 percent to C$868 million from C$805 million in the same period a year earlier.

CanWest said its interest expense jumped to C$82.4 million from C$42.2 million a year earlier. It had C$27.8 million in interest-rate and foreign currency swap losses, compared with gains of C$8.8 million the year before.

Analysts were expecting the company to earn 33 Canadian cents a share before one-time items on revenue of C$878.3 million, according to Reuters Estimates.

CanWest and an affiliate of U.S. investment bank Goldman Sachs GS.N are buying Canadian specialty-TV group Alliance Atlantis Communications for C$2.3 billion.

Last month, the takeover cleared a major hurdle when Canadian television regulators approved the deal.

CanWest’s publishing revenue rose to C$361.9 million from C$343.9 million a year earlier. Its TV revenue spiked to C$550.3 million from C$423.8 million a year earlier as it added Alliance Atlantis’s broadcast operations to its top line.

CanWest shares were up 4 Canadian cents at C$6.63 on the Toronto Stock Exchange shortly after the earnings report.

($1=$1.01 Canadian)

Reporting by Wojtek Dabrowski; Editing by Peter Galloway

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