February 4th, 2009
AOL ad revenue slide continues; Time Warner writes down acquisitions
Time Warner’s fourth quarter financial results showed more pain for its struggling AOL unit.
In the fourth quarter (statement), AOL revenue fell 23 percent from a year ago to $968 million. Ad revenue fell 18 percent and subscription revenue fell 27 percent from a year ago. AOL also had an operating loss of $1.9 billion largely due to a $2.2 billion non cash charge related to the carrying value of goodwill. In a nutshell, AOL acquired a bunch of companies such as Bebo that aren’t worth anything near what Time Warner paid for them.
For the year, AOL revenue declined 20 percent to $4.2 billion due to a decline in subscription and ad revenue. Subscription revenue fell 31 percent from a year ago and ad revenue fell 6 percent.
By the metrics, AOL still has plenty of eyeballs, averaging 109 million average monthly unique users in the U.S. AOL still–can you believe it?–has 6.9 million people paying for online access.
As a combined entity, Time Warner reported a fourth quarter net loss of $16 billion, or $4.47 a share, due to a bevy of write-downs on revenue of $12.3 billion, down 3 percent from a year ago. If you exclude the kitchen sink of charges, Time Warner reported earnings of 23 cents a share. Wall Street was expecting earnings of 26 cents a share.
For the year, Time Warner reported a loss of $13.4 billion on revenue of $46.9 billion, up slightly from $46.5 billion in 2007. In a statement, the company said that is also pondering a reverse stock split. For 2009, Time Warner says it expects adjusted earnings to be flat compared to earnings of 66 cents a share in 2008. Wall Street was expecting earnings of 99 cents a share for 2009.
Here’s a look at Time Warner’s results by unit:
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
For daily updates, follow Larry on Twitter.
Subscribe to Between the Lines via Email alerts or RSS.
