AOL Earnings Nearly Double
Thursday, October 19th 2000, 12:00 am
By: News On 6
RICHMOND, Va. (AP) â€” America Online Inc.'s earnings nearly doubled in the quarter ending in September as the company added 1.4 million new customers and recorded a 34 percent increase in revenues.
AOL reported first quarter profits Wednesday of $345 million, up from $181 million for the same period last year. Per-share earnings were 13 cents compared to 7 cents. Taking out merger-related costs, the latest per-share figures were 14 cents, edging the 13 cents expected by analysts surveyed by First Call/Thomson Financial.
``This is truly an exciting moment for our company as we approach our landmark AOL-Time Warner merger,'' said chairman Steve Case. ``Our record-breaking results underscore that we are continuing to build our interactive businesses at a rapid pace, both in the US and around the globe.''
Revenues rose to $1.98 billion from $1.48 billion.
Shares of both AOL and merger partner Time Warner pulled back on Thursday after an early bounce. In Morning trading on the New York Stock Exchange, AOL was off $2.65 a share at $44.26 after bobbing over $50, while Time Warner was down $1.30 at $67.95. Both stocks had dropped sharply on Tuesday on concerns that AOL could be affected by an overall decline in online advertising spending.
``It was a short-term speculation,'' said Mike Kupinski, a financial analyst with A.G. Edwards & Sons, Inc. The backlog of advertising contracts at AOL had not been growing as rapidly as previous quarters, Kupinski said.
``But the fact of the matter is the number of subscribers continue to rise,'' Kupinski said. ``As the numbers improve, we think advertisers will continue to be attracted to AOL because they want to reach all those eyeballs.''
Advertising, commerce and other revenues climbed to $649 million, more than 80 percent over last year's corresponding quarter.
For the three-month period ending Sept. 30, the company added 1.4 million subscribers, making a total of more than 24.6 million members worldwide. Revenue from subscriptions increased 20 percent to $1.2 billion.
America Online is the world's largest Internet provider. Earlier this year it announced plans to merge with Time Warner, the world's largest media company.
European regulators have cleared the merger, but the Federal Trade Commission has recommended that the deal be stopped unless the companies allow competing Internet access providers to sell their services over Time Warner's cable TV systems.