UPDATE 3-Time Warner sees $25 bln Q4 charge, cuts outlook

* Sees Q4 loss due to $25 bln in goodwill writedowns

* Q4 charge led by lower cable asset valuations

* Cites weaker-than-expected ad sales at AOL, publishing

* Shares fall more than 6 percent (Adds analyst comments, details on cable valuations)

By Yinka Adegoke

NEW YORK, Jan 7 (Reuters) - Time Warner Inc expects a fourth quarter loss due to a $25 billion charge, largely related to the depressed value of its cable assets, and said advertising at its AOL and publishing units were weaker than expected.

Shares in the media conglomerate fell more than 6 percent on Wednesday as investors feared the fourth-quarter results could indicate a tougher media market in the coming year.

"The operating performance of the business seems a little weaker than expected in the fourth quarter and could indicate weakness in 2009," said Chris Marangi, an analyst at Gamco Investors, which holds Time Warner Inc and Time Warner Cable stock.

Time Warner expects to post a net loss in 2008, compared to its previous forecast of earnings per share in the range of $1.04 to $1.07. Analysts polled by Reuters Estimates had forecast net profit of $1.07 before one-time items.

In the fourth quarter, about $15 billion of the charges are for its Time Warner Cable unit, which Time Warner expects to split off by the end of the current quarter. Both companies are due to report results on Feb. 4.

Time Warner Inc is also taking charges related to its Time Inc and AOL units.

Time Warner, which also owns CNN cable network and Warner Bros movie studios, lowered its fourth quarter outlook for adjusted operating income before depreciation and amortization (OIBDA) due to one-time charges and the weaker-than-expected advertising market.

It expects OIBDA, a measure of cash flow the company prefers, will rise about 1 percent for the full year from $12.9 billion in 2007. That is down from a previous forecast for 5 percent growth.

CHALLENGING MARKET

Time Warner said the economic environment had proved "somewhat more challenging" than it had expected, particularly for its ad businesses at the AOL online and publishing units.

In addition to the goodwill writedowns, Time Warner Inc said it will record charges of up to $380 million in the fourth quarter.

They include a $280 million judgment against its Turner Broadcasting unit in December, up to $60 million from the restructuring of a lease held by Lehman Brothers until it went bankrupt.

It will also book a $40 million increase in reserves for potential credit losses from bankrupt customers including Circuit City and U.K. retailer Woolworths

The charges lowered its original 2008 OIBDA forecast by around 3 percentage points. Weaker-than-expected ad sales at AOL and publishing accounted for another 1 percentage point drop.

The news of the writedowns put cable asset valuations in the spotlight.

Time Warner Cable shares fell more than 5 percent, Comcast Corp declined 3.8 percent and Cablevision Systems slipped nearly 3 percent.

"We note this is non-cash and largely a function of depressed public market valuations," Credit Suisse said of the Time Warner Inc writedowns in a client note. "As such we expect other media companies to take similar write downs."

Comcast is unlikely to take an impairment charge on its cable franchise rights in 2008, according to a person close to the company. But it will likely take a charge on its stake in Clearwire Corp , which is building a high-speed wireless network.

Time Warner Cable said in a separate statement it also anticipates a non-cash impairment charge of around $350 million related to its stake in Clearwire. It expects to incur a net loss in 2008. (Editing by Derek Caney)