AOL Time Warner to Revise Forecasts
AOL Time Warner Inc., the biggest media and Internet company, is expected to revise its 2002 revenue and profit forecasts today as advertising slumps and subscriber growth at its America Online unit slows, analysts said.
The New York-based company is coping with lower advertising sales at units such as magazines, cable TV networks and America Online, where third-quarter ad sales fell 12% from the previous quarter.
Shares of AOL Time Warner rose 37 cents Friday to close at $31.95 on the New York Stock Exchange. The stock fell 7.8% last year.
AOL Time Warner may trim 2002 forecasts for “double-digit” percentage growth in cash flow, or earnings before interest, taxes, depreciation, amortization and other expenses, analysts said.
Co-Chief Operating Officer Richard Parsons, who becomes chief executive in May, is taking over a company that in September lowered its 2001 cash-flow and revenue forecasts.
“It certainly wasn’t an ‘A’ year,” said Youssef Squali, an analyst at FAC/Equities in New York, who has a “buy” rating on the stock and doesn’t own shares.
“Part of their problem was their goals were too aggressive, and the economy didn’t perform as well as people expected two years ago,” Squali said.
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