|
AOL 4Q meets estimates
|
 |
January 30, 2002: 12:33 p.m. ET
Media conglomerate's earnings before charges grow from year earlier.
|
NEW YORK (CNN/Money) - AOL Time Warner, Inc. posted a wider net fourth-quarter loss Wednesday due to a $1.7 billion write-down of some investments, yet matched Wall Street expectations excluding charges, as it faced an advertising slump and slower growth at its online business.
The world's largest Internet and media company, the parent of CNN/Money as well as HBO, People magazine, and record labels that feature Madonna and Enya, said its net loss widened to $1.8 billion, or 41 cents a share, from $1.09 billion, or 25 cents a share, a year earlier.
Excluding charges and other items, the company posted earnings of 33 cents a share, up from 28 cents a year earlier.
Revenue increased 4 percent to $10.6 billion.
The company's results were in line with a lowered outlook that the company issued earlier this month and met analysts' estimates, according to earnings tracker First Call.
|  | |
 |
|
|
| |
CNNfn's Jen Rogers with more on AOL's 4Q earnings report.
| |
|
The latest results include the non-cash write-down of certain investments, mainly Time Warner Telecom, as well as merger-related charges.
"The bottom line on 2001 is that we turned in a strong performance capped by what I believe was very positive momentum in the fourth quarter in all key strategic areas, except advertising," CEO Jerry Levin told analysts during a conference call Wednesday following the earnings announcement.
Levin, who is retiring on May 23 after 30 years, is being replaced by Richard Parsons.
Parsons told analysts during a conference call Wednesday that the company plans to put much of its energy in 2002 into expanding its broadband business, which allows high-speed access to the Internet, as well as phone and cable television connections.
The company said advertising and commerce revenue fell 15 percent in the quarter to $2.2 billion from $2.6 billion, reflecting a sharp downturn as the economy slipped into recession during the year.
Despite the drop in advertising revenue, Robert Pittman, AOL Time Warner's chief operating officer, said the company increased its own spending on advertising and marketing in 2001.
"We actually increased our spending this year because we believe it is a great time to build market share using advertising," Pittman said.
Addressing concerns about its maturing online business and slowing subscriptions to its America Online Internet services, Pittman cited industry statistics that showing 45 percent of American households are not yet connected to the Web. Of that, about 28 percent are expected to get connected this year, with AOL grabbing about half of those subscriptions, Pittman said.
"AOL was a little light on the top line but made it up on the cost line," Friedman Billings Ramsey analyst Robert Martin told Reuters Wednesday. "There were no surprises based on what we heard on Jan. 7."
AOL Time Warner (AOL: down $1.93 to $24.77, Research, Estimates) revised its growth projections twice after standing by aggressive targets set out last January for months, even as rivals lowered expectations.
After the Sept. 11 attacks and the protracted ad slump and economic slowdown, the company was forced to rein in expectations, and executives again brought in targets earlier this month.
Click here to check other media & entertainment stocks
The company calculated year-earlier results on a pro forma basis assuming that America Online had completed its $106.2 billion purchase of Time Warner by January 2000, rather than the actual closing date of January 2001.
AOL Time Warner said earnings before interest, taxes, depreciation and amortization, a widely watched measure of cash flow for media companies, rose 14 percent to $2.8 billion in the quarter and 18 percent to $9.9 billion for the year.
Earlier this month, the company had said it expected 2001 EBITDA to grow about 18 percent to just below $10 billion -- shy of its September forecast for 20 percent growth.
AOL Time Warner said it added 1.9 million new members to its flagship Internet service in the fourth quarter, bringing the AOL subscriber base to 33.2 million.
So far this year AOL Time Warner has taken a conservative outlook -- a marked contrast to the company's aggressive growth targets set last year -- in hopes of promising less and delivering more.
The company reiterated its outlook for 5 percent-to-8 percent growth in revenue and 8 percent-to-12 percent growth in EBITDA, with the forecast including its acquisition of AOL Europe and magazine publisher IPC Media. 
-- from staff and wire reports
|
|
|
|
|
|
|
