You've got malaise!

Analysts expect bad 2002 earnings forecast from AOL Time Warner

Wall Street's media players are bracing for another round of bad news today, this time from AOL Time Warner, which is scheduled to issue an earnings forecast for the new year.

Several analysts are anticipating bad news and have revised their earnings forecasts downward. Morgan Stanley's Rich Bilotti and Mary Meek trimmed expected 2002 cash- flow growth from 15% to just 8%. Sanford Bernstein media analyst Tom Wolzien cut his 2002 estimate from $11.6 billion to $10 billion.

One continuing problem is ad sales at the Turner cable networks. Bilotti sees the basic networks' total ad revenue dropping about $100 million, to $2.4 billion, despite ratings gains.

AOL wouldn't detail what new CEO Richard Parsons will disclose on the call.

AOL's briefing follows Disney Chairman Michael Eisner's warning last week to shareholders that, despite his confidence in an eventual rebound, the company faces tough problems in the coming months.

Eisner cited the company's broadcasting business as one of its top "challenges" in 2002.

ABC was hit last year by the "one-two punch of a down economy and a drop in ratings. Developing hit programs is the only way out of the problem," Eisner said. "Of course, there is no formula for creating great content. But it is what we must do to reap the considerable rewards of owning a broadcast network. … One of our top priorities is to develop the kinds of programming that will underpin resurgent long-range success."