Canwest reports steep loss on write-down

The media giant reported Friday a fiscal fourth-quarter loss of 1.02 billion Canadian dollars due to the noncash writedown, reversing a year-earlier profit of 197 million Canadian dollars. Such writedowns account for a drop in the value of a company's assets, but don't require it to lay out any cash.

Canwest says it is also facing headwinds from regulatory changes in the Canadian conventional television industry.

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

Earlier in the week, Canwest announced it will cut 560 jobs, or about 5 percent of its work force, as its struggles with a rougher economy and stiffening competition. Canwest employs about 10,500 people in Canada.

Peter Murdoch, vice president of media for the Communications, Energy and Paperworkers Union of Canada, said Friday that it's unlikely the latest cuts, which come on top of several hundred jobs cut earlier this year, would do much to reverse the company's misfortune.

"As with financial institutions south of the border, it is a victim of its own greed," said Murdoch. "Notwithstanding the financial crisis, this company's problems are largely of its own making--the result of very bad financial decisions."

Following Canwest's report, Credit Suisse downgraded the company's shares to neutral from outperform amid mounting balance-sheet pressures.

The Winnipeg-based company, which publishes the National Post newspaper and owns the Global TV network among other media properties, said its quarterly loss amounted to 5.73 Canadian dollars ($4.71) per share, compared with a year-ago profit of 1.11 Canadian dollars.

Revenue rose to 726 million Canadian dollars ($597 million) from 678 million Canadian dollars ($557 million) last year.