Posted on 07/24/2002 2:22:42 PM PDT by newsperson999
5:00 pm 7/24/02 Chief Executive Richard Parsons said Wednesday that the U.S. Securities and Exchange Commission had opened a fact-finding inquiry into its accounting practices. Parsons announced the news at the company's conference call and defended the company's accounting practices. The Washington Post last week ran several articles that AOL Time Warner boosted revenue figures through unconventional deals the past couple of years.
BigMack
I'm SHOCKED
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AOL Time Warner tops Street view |
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NEW YORK (CBS.MW) -- AOL Time Warner said Wednesday it turned a second-quarter profit of $394 million, surpassing Wall Street's estimates as revenue rose to $10.6 billion. Separately, Chief Executive Richard Parsons disclosed that the Securities and Exchange Commission is conducting a "fact-finding" investigation into the way the company's America Online unit booked certain advertising transactions. The deals provoked questions after they were highlighted in a published report last week. In the earnings report, the world's largest media and Internet company posted a profit of 24 cents a share, compared with 32 cents a share and $9.2 billion in revenue for last year's second quarter. This year's quarterly per-share figure was 2 cents better than the Thomson Financial/First Call consensus estimate. Revenue was expected to total $10 billion. Net income came to $394 million, or 9 cents a share, compared with a loss of $374 million, or 17 cents a share in last year's second quarter. In after-hours trading, AOL shares (AOL: news, chart, profile) dropped to $10.66. In the regular session, the stock closed down 15 cents, or 1.3 percent, to $11.40, on a day that saw the Dow Jones Industrial Average explode in a historic leap of 488.88 points, or 6.3 percent, to 8,191.29. The latest report marked the second consecutive quarter that AOL released its earnings results in the shadow of bad news. Last week, Robert Pittman, was forced out as the company's chief operating officer. Three months ago, AOL's announcement followed news that the company had reported the biggest quarterly loss in corporate history. Further, on Tuesday, AOL rushed to deny a published report that Chairman Steve Case would step down over differences with Parsons' decision to replace Pittman with Time Warner executives Jeff Bewkes of HBO and Don Logan of Time Inc. AOL said Case supported the move and planned to stay at the company. For his part, Parsons has had a difficult time impressing Wall Street since he replaced Gerald Levin, an architect of the merger that created AOL Time Warner. AOL's stock has dropped some 39 percent since he replaced Levin. Wall Street is unconvinced that Parsons can enact a plan that will revive the America Online unit, concoct a growth strategy overall and promote cooperation between the warring America Online and Time Warner factions On a long-term basis, analysts have said AOL's stock, which has fallen 73 percent in the past year, could be bottoming. The stock "could double" in the next 12 months, said David Joyce, an analyst with Miami-based Guzman & Co. He expects the company's troubled America Online unit to show improvement as the online advertising business picks up. A year ago, the America Online division produced 23 percent of the parent's revenue. AOL Time Warner was formed when America Online acquired Time Warner for $124 billion in January 2001. |
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"You've Got Jail"...
It would be a handy visual aid.
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