This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

AOL Tops First-Quarter Estimate

AOL-Time Warner (AOL) beat analysts' estimates for the first quarter, but took a major charge to write down some of its investments.

As expected, the company's online, cable and television networks divisions made the biggest contributions to the company's bottom line, while the company's music and movies operations were the weakest.

In the quarter, the media and entertainment conglomerate reported cash earnings per share of 23 cents, up from the 19 cents a share pro forma figure a year earlier and ahead of the consensus of 20 cents forecast by analysts surveyed by Thomson Financial/First Call. Revenue for the quarter was $9.1 billion, up from $8.3 billion a year ago. The merger of the former America Online and Time Warner was completed in January, so last year's first quarter was reported on a pro forma basis, or as if the companies were merged then.

Joining other companies that have written down the value of their stock portfolios in recent months, AOL-Time Warner took a $620 million noncash pretax charge against the value of publicly traded and privately held investments in its portfolio that suffered, as the company put it in its earnings announcement, "other-than-temporary declines." The company didn't immediately specify which investments were written down.

Including that writedown and merger-related expenses of $71 million, the company reported a net loss of $1.4 billion, or 31 cents per share. That compares to a similar net loss of $1.5 billion, or 34 cents per share, one year earlier.

The company touted its results as a fulfillment of the promise of the merger that created AOL-Time Warner. "Our businesses are working together as one, unified organization to deliver shareholder value over the near- and long-term," CEO Jerry Levin said in a statement.

The company reported earnings before interest, taxes, depreciation and amortization of $2.1 billion for the quarter, up from $1.8 billion a year ago. AOL-Time Warner has set a goal of $11 billion EBITDA for the year.

Among other operating highlights, advertising and commerce revenue from the America Online service hit $721 million, up sequentially from the fourth-quarter figure of $686 million. Most other Internet companies, including Yahoo! (YHOO), have reported sequential declines.

Advertising and commerce revenue from cable operations fell sequentially from $160 million in the fourth quarter to $117 million in the first, though the first-quarter advertising and commerce figures were up 17% from a year ago. The company added 400,000 digital cable subscribers in the quarter, off the pace of the 479,000 subscribers it added in the fourth quarter. But the rate of subscriber additions to AOL-Time Warner's Road Runner high-speed cable service grew slightly, from 227,000 new subscribers in fourth quarter to 237,000 in first quarter.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs