AOL Time Warner Inc. lowered its long-standing guidance, citing effects stemming from the Sept. 11 terrorist attacks. The company's ad revenue fell with its uninterrupted coverage of events even as it upped its newsgathering expenses.
Still, "No financial impact can compare to the terrible suffering and loss of life inflicted by the vicious attacks of Sept. 11," AOLTW CEO Gerald M. Levin said in a statement.
As a result, its 2001 EBITDA growth will be in the 20 percent range, compared with the original 30 percent AOLTW expected. Revenue growth will reach 5 percent to 7 percent, it says, compared with the previously expected 12 percent to 15 percent. Earnings per share would be lower than expected, AOLTW says, but it didn't give specifics.
AOLTW says its 2001 results stem from declining ad revenue, which already had fallen before Sept. 11. The company's newsgathering operations — CNN, Time Inc., NY1 and AOL — ran up extra costs with 24-hour coverage, with additional funds earmarked for more.
The state of the ad market is affecting its networks, America Online, and its publishing and cable operations, it says.
Its subscription and content businesses, which AOLTW says contributes more than 75 percent of total revenue, shouldn't feel the impact very much, it says, adding that, as a result, 2002 EBITDA growth should reach unspecified double digits.