Whatever you think about
AOL Time Warner
, you'll have a lot more to think about on Wednesday.
That's when the company will hold a daylong session with analysts and major shareholders, its first major briefing of where the company is headed since its formation this month in the merger of
Though AOL has already
announced substantial layoffs,
shuffled some executives, publicized various joint ventures and made preliminary financial forecasts, this is AOL Time Warner's big opportunity to discuss the opportunities and goals for the newly merged company. So analysts and investors expect the company to spend most of its time outlining operational philosophies and discussing the yardsticks by which its executives believe Wall Street should judge it this year and beyond.
So far, investors seem to be judging the company kindly. AOL's stock is up 55% for the year, though it was down 86 cents Tuesday at $54.14.
If, by expounding upon its previously disclosed vision of AOL guiding Time Warner into new media and Time Warner anchoring AOL in the old, AOL is putting meat on the bones of the vision it has already outlined, investors will have plenty to chew over Wednesday.
Food for Thought?
After a ceremonial carbo-loading meal Tuesday evening, the postmerger marathon kicks off at 8:30 a.m. EST in New York City, when top executives will discuss the results of the quarter ended Dec. 31. Though the quarter ended before the merger took place, these results will be the first that AOL Time Warner will report as a merged company. AOL, which has traditionally ended its fiscal year on June 30, is switching over to a calendar financial year, so it will be reporting the fourth quarter. AOL plans the rehash of its results will take 3 1/2 hours, against the standard one hour at most companies.
After a lunch break, the fun will resume at 1:30, as the chiefs of seven AOL units, from the America Online operation to Warner Music Group, make presentations to the assembled mass of investors.
If, as a holder of 100 shares or so of AOL Time Warner, you find that you haven't received an invitation to this do, don't despair: The company is Webcasting everything but the meals, so you can listen along. Just go to the
investor relations section of the AOL Time Warner Web site.
To make it easier to follow along, AOL has provided a study guide, of sorts. Last week, the company released six pages of
pro forma financials -- that is, financial results for past quarters presented as if the merger had taken place at the beginning of 1999. Armed with those printouts, investors can get a better grip on the context of the fourth-quarter results and any forecasts.
All that said, investors aren't bracing for any huge surprises, either positive or negative, for the day.
Mark Greenberg, portfolio manager of the
Invesco Leisure fund, says he expects executives to talk about how they'll integrate all of the company's operations, what synergies they see and where the big potential is. "They've been working on this for a year," Greenberg says. "I think they've got the integration about as planned out as it can be. I don't think there are any monsters under the bed."
Henry Blodget published a note saying he thought the company might announce a price increase for America Online subscriptions, a move that would contribute $400 million in earnings before interest, taxes, depreciation and amortization. AOL is forecasting 2001 EBITDA of $11 billion and revenue of $40 billion, targets Blodget calls achievable. Blodget has a buy on the stock; his firm has done underwriting for the company.