Old media strong, new media weak for AOL

By Alun Williams

Posted on 24 Oct 2002 at 12:07

Reports of a slight profit by AOL/Time Warner are overshadowed by news that the company is to restate two years of financial results following an 'internal review'.

The giant 'new media'/'old media' amalgam has announced that revenues for the two year period were overstated by $190m. The Internet division - America Online - accounted for $168m of this total, due to a reduction of advertising revenues.

'While the internal review is still ongoing, based on the substantial work done to date, the company does not expect any further restatements as a result of this review,' said the official company statement accompanying the release of the latest results.

We reported back in July - AOL above-expectation results and under investigation - that AOL faced a 'fact-finding' investigation by the US Securities and Exchange Commission (SEC).

Accounting procedures apart, AOL/TW reported a slight third-quarter profit, of $57m. At least this compares favourably with when AOL/TW was haemorrhaging money at the beginning of the year.

This net income was achieved on sales revenue of $10bn, an increase of six per cent from the same period in 2001.

Among the highlights of the year for the company were the old media performers: the home video success of The Lord of the Rings and the 'strong theatrical results' of Austin Powers in Goldmember.

'I'm pleased our overall performance was right in line with expectations,' said company CEO Dick Parsons. 'Our operating results reflected the continued collective strength of our traditional media and entertainment businesses, offset by the declining trend in advertising at America Online.'