New York-based Time Warner said its results, particularly for its AOL and publishing unit's advertising operations, have been pressured by economic conditions that are more difficult than it initially anticipated.

Time Warner's cable television arm Time Warner Cable Inc will account for US$15 billion of the charge, with the remaining $10 billion related to its publishing and AOL divisions, spokesman Edward Adler said, declining to give further specifics.

Because the charge was a noncash item that will not have adverse tax implications, Chief Financial Officer John Martin shrugged it off.

'It's a noncash book writedown. We don't see any adverse impacts to the business at all,' Mr Martin said on Wednesday in comments broadcast live on the Internet from an analysts conference in Phoenix. 'It's noncash and we move on.' The charge will lead to an operating loss for the fourth quarter.

Time Warner also anticipates a full-year loss, down from a prior outlook for a profit between US$1.04 and US$1.07 per share.

Analysts polled by Thomson Reuters predict 2008 earnings of US$1.08 per share. Analysts' estimates typically exclude one-time items.

Time Warner's stock dropped 69 cents, or 6.3 per cent, to close at US$10.29. The shares have ranged from $7 to US$16.90 over the past year.

Time Warner Inc. also said it anticipated a charge of about US$280 million related to a December judgment against Turner Broadcasting System for the 2004 sale of the Atlanta Thrashers hockey and Atlanta Hawks basketball teams and a $50 million to US$60 million charge for a lease restructuring for space at New York's Time & Life Building held by Lehman Brothers Holdings Inc., which filed for bankruptcy protection in September.

Time Warner, which also owns the CNN cable network and the Warner Bros. film studio, said it feels there are 'strong grounds' to have the verdict in the Turner Broadcasting case set aside by the trial court or overturned during an appeal.

The company also expects it will boost reserves by about US$40 million for possible credit losses related to some customers that have declared bankruptcy. Those customers include Circuit City Stores Inc. and Woolworths in the UK, among others, Mr Adler said.

Richmond, Virginia-based electronics retailer Circuit City filed for bankruptcy protection and Woolworths filed for a form of bankruptcy protection in November.

Despite the hefty charges, analysts seemed relatively unfazed.

Wunderlich Securities Inc.'s Martin Pyykkonen called the fourth-quarter charges substantial, but noted that they are non-operating items, including the legal judgment and lease restructuring. He reaffirmed a 'Buy' rating and $16 price target.

Benjamin Swinburne of Morgan Stanley kept an 'Overweight' rating on Time Warner, calling its lowered forecasts 'modest'. While analysts remain upbeat on Time Warner, the company has several in-house issues to contend with.

Time Warner Cable, the nation's second-largest cable operator, is set to be spun off by Time Warner this year. The cable company said it expects a noncash impairment charge of US$15 billion on its cable franchise rights in the fourth quarter, resulting in a loss for 2008. Analysts expect Time Warner Cable to report 2008 profit of US$1.16 per share.

Time Warner Cable noted that its stock price tumbled during the second half of 2008, which indicates a 'significant decrease in the value of its cable franchise rights'. The company's stock is off 30 per cent from its 52-week high of US$31.56 set last May.

It also foresees an approximately US$350 million impairment charge on its investment in wireless broadband provider Clearwire Corp.

Intel Corp also said on Wednesday that it needs to absorb a charge for the deterioration of the value of Clearwire investment.

Time Warner Cable shares closed down US$1.09, or 4.8 per cent, to US$21.56 on Wednesday.

Aside from its cable business, Time Warner Inc's publishing unit has had to contend with a dismal advertising environment, while its AOL division continues to be a headache.

Advertisers have sharply curbed their spending during the latest recession in an attempt to control costs. The move has hobbled the publishing sector and led to job cuts, including some at Time Warner. In October, the company's publishing arm - Time Inc., which publishes titles such as People, Sports Illustrated and Real Simple - said it would cut an unspecified number of jobs and organize itself into three business units as it faced sharp drops in advertising spending.

Meanwhile, AOL has unsuccessfully attempted to shift from its roots as an Internet access provider to an advertising-focused company. In November, AOL reported a 6 percent drop in third-quarter online ad revenue, while chief rivals like Google Inc. and Microsoft Corp. saw gains. Time Warner has been working to split AOL's access and advertising businesses operationally, a move that would make it easier to sell off one or both. It has engaged in talks with Yahoo Inc., Microsoft and Earthlink Inc. about potential AOL acquisitions.

Last month, Time Warner disclosed in a securities filing that it asked shareholders to approve a reverse stock split that would reduce the number of outstanding shares and double or triple the share price. The company believes the reverse split will improve liquidity in the stock following the planned spinoff of Time Warner Cable, which could cause Time Warner's shares to fall.

As of No. 20, there were 3.59 billion outstanding common shares in Time Warner.

A special shareholders meeting is set for Jan 16 to vote on the proposal.

Time Warner is scheduled to report fourth-quarter results on Feb 4. -- AP