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AOL Time Warner Fails to Disappoint

The company beats lowered expectations for its third quarter.

AOL Time Warner

(AOL)

beat diminished expectations for its third quarter ended Sept. 30.

The media and entertainment conglomerate said Wednesday morning that it posted $9.32 billion in revenue for the quarter, up from the $8.76 billion pro forma figure for the third quarter of 2000.

Primed for bad news by the company's

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Sept. 24 preannouncement, analysts had expected $9.14 billion in revenue for the quarter, according to Thomson Financial/First Call.

Cash earnings per share, excluding merger-related costs and certain one-time items, amounted to 30 cents, compared with a consensus estimate of 26 cents and a year-ago pro forma figure of 21 cents.(America Online and Time Warner completed their merger in January of this year.)

Down from its 52-week high of 58.51, AOL Time Warner closed at $33.50 Tuesday, unchanged. Before the market's open Wednesday, the stock was listed at $34.80 bid and $35.90 asked on Island.

The company said subscription revenue, which it characterizes as a relative safe haven in the current weak advertising climate, rose 13% to $4.2 billion. Advertising and commerce revenue fell 5% to $1.9 billion.

AOL Time Warner's actual net loss for the quarter was $996 million, or 22 cents per share, including $134 million in merger-related expenses and a $196 million noncash writedown on investments. That compares to a pro forma net loss of $902 million, or 21 cents per share, in the corresponding period one year earlier.