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AOL noses past 2Q target
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January 19, 2000: 7:05 p.m. ET
Online leader posts 9 cents a share on operating basis, as subscribers roll in
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NEW YORK (CNNfn) - America Online Inc., citing increased revenue from advertising and e-commerce, reported a sharp increase in earnings on Wednesday.
The Dulles, Va.-based company, which early this month announced a blockbuster merger with CNNfn parent Time Warner Inc., reported a profit of $224 million, or 9 cents per diluted share, up from $86 million, or 4 cents a share, in the same quarter a year ago. Both figures excluded one-time gains and losses.
The earnings report beat analysts polled by First Call Corp. by a penny per share.
Total revenue rose to $1.6 billion, or 41% more than in the same quarter last year.
AOL Chairman and CEO Steve Case said he "could not be more pleased with the results" of this "record-breaking quarter."
AOL (AOL) also logged impressive increases, 1.8 million worldwide, in new memberships during the quarter. The number of AOL members grew to 20.5 million while total membership across all brands, including AOL and Compuserve, grew to 23.8 million.
AOL users also increased the time they spent on the Internet during the quarter, to 63 minutes a day, an increase of 9 minutes over the same period last year.
AOL's solid performance over the past quarter appeared to have a calming effect on investors. AOL shares rose 3-5/8 to 64-7/8 Wednesday and were little changed in after-hours trading. AOL stock has performed erratically in the days following the news of the merger with Time Warner. Shares plunged about 20 percent, from $73.75 the day before the deal was announced, as investors and analysts expressed concern over the undertaking.
In a conference call on Wednesday, however, AOL executives touted the marriage of AOL technology with Time Warner news and entertainment content as the factor that will create better earnings in the years to come.
"I have strong confidence there will be explosive growth" following the completion of the merger between AOL and Time Warner, said AOL President Bob Pittman. "We believe there is limitless potential" and hope make the new company the hallmark of a new global revolution, he said.
The merger is expected to take about a year to complete. Case and Pittman expressed confidence that the merger will go smoothly and indicated that talks among top executives from both companies, a transition team of eight, are progressing rapidly.
James Waggoner, an analyst with Sands Brothers & Co., said AOL's performance met, but did not greatly exceed, expectations. "The bottom line from AOL was above the printed consensus
and I think the subscriber levels were above where we'd been looking for them to be, and where most optimistic analysts expected them to be." 
-- from staff and wire reports
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