AOL Time Warner sliced its financial forecast, saying that the fallout
from the terrorist attacks would cost the company $1 billion to $2 billion.
The company said that its revenues for the full year
would grow 5-7% to between $38 billion and $38.7 billion.
The high end of the range would be $1.3 billion short of the company's
much-touted goal of 12-15% growth to $40 billion.
AOL top executives Steve Case and Jerry Levin had all year dismissed strong skepticism that AOL would actually meet its goals. Those projections were intended to convince investors of the financial power of the AOL-Time Warner combo in January.
Cash flow will only grow 20% to $9.9 billion instead of the 29% or $11 billion AOL had been promising.
AOL said that in addition to a stall in advertising, it has committed "substantial additional financial resources" to it news operations, including CNN, Time, and NY1. - John M. Higgins