AOL Time Warner posts $1.09 billion loss - Broadcasting & Cable

AOL Time Warner posts $1.09 billion loss

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AOL Time Warner recorded a net loss of $1.09 billion for the 2000 fourth quarter, taking a bigger hit than expected from its mega-media marriage fees.

That compared to a loss of $200 million during the comparable quarter one year ago. It included payment of $194 million in preferred dividends. Revenue hit $10.2 billion, an eight percent increase over the $9.46 it drew a year earlier. EBITDA (earnings before interest, taxes, depreciation and amortization) hit $652 million, a 58% jump over 1999.

Growth in ad revenues for the quarter ($686 million, up 71%) and America Online subscription revenues ($1.2 billion) and AOL sub growth - 130 million at year's end - were offset by the troubles at Time Warner's CNN unit and the underperformance of feature films, such as Little Nicky. Skeptical observers were left wondering whether AOL Time Warner will hit its projected $40 billion in revenues and $11 billion in EBITDA in 2001.

At an investors day event in New York on Tuesday, the mega-media giant sought to assure analysts that revenue growth for the year would be in the 12-15% range. "Strong growth in subscription and advertising revenues will drive the company's performance," said J. Michael Kelly, AOL Time Warner's chief financial officer.

All this follows the plans AOL Time Warner unveiled just last week to slash 2,000 jobs for greater efficiency in the company, including cuts from America Online's Internet operation, Time Warner's New Line cinema unit and the Warner Music Group. - Richard Tedesco

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