AOL Time Warner reports $US1.1B loss, forecasts growth

Freshly merged AOL Time Warner has reported wide losses for the joined company but record numbers for its America Online internet business.

          Freshly merged AOL Time Warner has reported wide losses for the joined company but record numbers for its America Online internet business. The company also said it expected its wide array of products and well-known brands to fuel revenue growth of up to approximately 15 percent in 2001.

          As a result of the recently closed merger, AOL Time Warner reported fourth quarter and full year results for the merged entity as well as results for AOL's fiscal second quarter, which ended Dec. 31.

          The world's largest internet media company said pro forma net loss at the combined company for the fourth quarter was $1.1 billion dollars, or $0.25 per common share, compared to a $194 million, or $0.05 loss per common share, in the year earlier period. For the year 2000 the loss was $4.38 billion, or $1.02 per common share, compared to $2.45 billion in 1999.

          Revenue at AOL Time Warner rose 8% to $10.23 billion for the fourth quarter and 11% to $36.21 billion for the year.

          The hefty loss can partly be attributed to merger costs. The AOL Time Warner merger was completed on Jan. 11.

          But company executives told investors and financial analysts in a meeting after the results were announced that they expect to meet its previously announced guidance for 2001, for more than $40 billion in revenue and $11 billion in EBITDA. They also forecasted cash earnings per share growth of 25 percent to 30 percent for the full year. The executives also said the company's revenue for 2001 is expected to grow in the 12 percent to 15 percent range, according to a company statement.

          Strong growth in subscription and advertising revenue, as well as multiple revenue streams from different world famous brands, will drive the company's performance, AOL Time Warner Chief Financial Officer J. Michael Kelly said in a statement.

          Shares in AOL Time Warner (AOL) were up 3.29% at $56.10 in mid-morning trading yesterday on the New York stock exchange.

          AOL Time Warner led its earnings report with adjusted earnings before interest taxes depreciation and amortisation (EBITDA). EBITDA in the quarter was up 14 % to $2.42 billion, compared to $2.12 billion in the year-ago period. For the year 2000 adjusted EBITDA increased 19% to $US8.39 billion, compared to $7.03 billion in 1999.

          AOL Time Warner reported all-time records in revenue, operating income, EBITDA and membership growth for its AOL internet business.

          Net income in its second quarter excluding one-time events climbed 67 percent to $365 million, or $0.15 per diluted share, compared to $219 million last year. The earnings per share beat the consensus estimate of 23 analysts polled by First Call/Thomson Financial by a penny.

          The EBITDA at the internet business before one-time events reached $652 million, up 58% compared to the year-ago period. AOL's sales were up 27 percent at $2.06 billion, from $1.62 billion a year ago.

          For its fiscal second quarter AOL net income including non-cash charges of $535 million at AOL was $37 million, down from $280 million in the year ago period. For the twelve months ended Dec. 31 net income was $1.15 billion, up from $1.03 billion the previous year.

          The flagship AOL online service welcomed 2.1 million new subscribers in December, over 1.2 million in the US and 850.000 abroad, a record according to the company. For the year AOL added 6.2 million members. At year's end the subscriber counter stood at 26.7 million.

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