AOL TW Posts Nearly $100B Loss for 2002

[Guest I'm That Damn Zzzzz]

NEW YORK — AOL Time Warner Inc. (AOL), the world's largest media company, posted a loss for all of 2002 of nearly $100 billion, the largest annual loss in U.S. history, after taking a $45.5 billion charge in the fourth quarter. In a sign of further turmoil, Ted Turner said he would step down as vice chairman.

 

The company, which in the first quarter had reported a net loss of $54 billion after writing down the value of assets, posted a full-year 2002 net loss of $98.7 billion. The full-year loss exceeded the gross domestic product of Egypt in 2001.

Separately, the company announced  Turner, 64, was stepping down from his role as AOL Time Warner's vice chairman. The former cable TV mogul wants to spend more time on his philanthropic endeavors, AOL chief Richard Parsons said.

 

"He's concluded now is the right time to make more space for his other activities," Parsons said in a conference call with analysts.

Turner told Parsons late Tuesday that he would step down, effective in May.

The company reported a net loss of $44.9 billion, or $10.04 a share, after the charge to write down the value of its embattled America Online business and other assets, compared to a year-ago loss of $1.8 billion, or 41 cents a share.

Not counting one-time items, AOL said it would have earned 28 cents per share. Analysts surveyed by Thomson First Call were predicting 26 cents per share, with revenue of $11.2 billion.

While analysts said overall operating numbers came in near expectations, some were taken aback at the size of the charge — which came on top of a $54 billion charge AOL took in the first quarter.

"The negative was the goodwill writedown of $45 billion, which was bigger than expected, although their debt covenants are still safe because they have to keep at least $50 billion in equity and they finished the year with about $52 billion," said David Joyce, an analyst at Guzman & Co.

The announcements were made after the markets closed. AOL stock closed higher, up 30 cents per share at $13.96 on the New York Stock Exchange. The shares dropped 9 percent early in the extended session.

The quarter caps a tumultuous year. About two years after AOL completed its $106.2 billion purchase of Time Warner, the old media veterans from Time Warner are running the show and the key architects of the deal have been forced out amid calls from angry investors that view the merger as a failure.

Strength in the company's film/entertainment business, with hits like the Lord of the Rings sequel, and cable networks offset weakness in the fourth quarter at America Online, which has been suffering from a sharp slowdown in advertising spending and subscriber growth.

AOL Time Warner said its revenue in the quarter grew 8 percent to $11.4 billion.

Earnings before interest, taxes, depreciation and amortization (EBITDA) — a key measure of cash flow — rose 16 percent to $2.8 billion from a year-earlier for the quarter.

Analysts polled by Multex expected, on average, EBITDA of $2.6 billion.

The company said it sees revenue growth for the 2003 full year in the mid-single digits and said it sees EDITDA to be essentially unchanged to down in the low-single digits.

Earlier on Wednesday, AOL Time Warner said it sold its 8.4 percent stake in Hughes Electronics Corp. as part of its efforts to cut its debt load.

The company said it plans to reduce total consolidated debt to approximately $20 billion by the end of 2004.

http://www.foxnews.com/story/0,2933,77012,00.html

[Guest RobJohnstone]

That's gotta hurt. I am glad socialist ted is getting his due.

 

--Rob

[Guest kkktookmybabyaway]

I have my opinions regarding Ted, but at least he didn't hold Atlanta hostage in regards to getting a new stadium...