AOL pulls off a solid quarter
Copyright 2003 TheStreet.com, Inc.
April 23, 2003 Wednesday 8:49 AM Eastern Time
AOL Time Warner (AOL:NYSE) managed a nearly $400 million profit in the first quarter, helped by subscription growth at its AOL Internet division and cable properties. The media company posted $10 billion in quarterly revenue and backed full-year revenue growth estimates in the mid-single-digits.
The news was viewed positively on Wall Street, with the shares bid up about 4% to $13.79 on the Instinet premarket session.
The company earned $396 million, or 9 cents a share, on 6.3% revenue growth in the latest quarter compared with a loss from continuing operations of $8 million, or break-even on a per-share basis, last year. Its bottom-line loss in the year-ago quarter was $54.2 billion, reflecting huge goodwill writedowns related to the merger of AOL and Time Warner.
Earnings before interest, taxes, depreciation and amortization — a metric preferred by managers of media companies — rose 14% to $2 billion, while cash flow from operations totaled $1.5 billion and free cash flow totaled $1 billion.
On the top line, content revenue rose 11% to $3.3 billion, reflecting gains at its movie-producing and HBO divisions. Advertising revenue fell 5% to $1.3 billion, reflecting decreases at America Online and its cable units, offset partially by gains at the publishing and networks divisions. Other revenue decreased 21% to $472 million due to declines at the America Online and Publishing divisions.
The company's troubled AOL division posted better-than-expected EBITDA of $400 million, up from $343 million a year ago, while the unit's revenue fell to $2.2 billion from $2.29 billion.
Net debt at the end of the quarter was $26.3 billion, up from $25.8 billion at the end of 2002, reflecting additional borrowing related to the restructuring of Time Warner Entertainment.