AOL Time Warner Posts Sturdy Q1 Results

19 April 2001

Media mammoth AOL Time Warner yesterday posted healthy results for the first quarter, boosted by a 10% jump in ad and commerce revenues and a 9% rise in subscriptions to its internet, cable and magazine operations.

The group, reporting its first quarterly results since January’s merger of AOL and Time Warner, revealed a net loss of $1.4 billion, narrower than the pro forma figure of $1.5bn in Q1 2000. This loss included expenses incurred in the merger as well as $620m in investment write-downs.

Meanwhile, EBITDA (earnings before interest, taxes and amortization) jumped 20% year-on-year to $2.1bn and earnings per share rose from a pro forma 19 cents last year to 21–23 cents. Revenues increased 9% to $9.1bn, comprising $3.9bn from subscriptions, $2.1bn from advertising and commerce and $3.2bn from content and other revenues (up 8% on last year).

Internet portal America Online, which recently saw its subscriber base exceed 29 million [WAMN: 17-Apr-01], had a particularly good quarter, with revenues jumping 17% on last year to $2.1bn and EBITDA growing 35% to $684m. Meanwhile, cable TV activities saw EBITDA jump 15% to $768m on $1.5bn of subscription revenue, with digital subscribers up over 300% to 3.3m. Revenues increased 6% to $1.7bn at the group’s networks, but fell 6% at Warner Music Group to $881m.

The results met most of the company’s financial targets, although the 9% growth in subscription revenues fell short of January’s forecast of 10%–12%.

Enthused Jerry Levin, the group’s ceo: “We are aggressively rolling out next-generation products and services that will fuel continued growth momentum in our subscription and advertising and commerce businesses. At the same time, we’re laying the groundwork for truly transformational businesses like digital music, interactive television and broadband services.”

News source: Financial Times; Wall Street Journal