NEW YORK (Reuters) - AOL Time Warner Inc. AOL.N , the world's largest media company, on Wednesday posted a 2002 loss of nearly $100 billion, the largest annual loss in U.S. corporate history, after taking a whopping $45.5 billion charge in the fourth quarter to write down the value of assets.
The company, which also said media mogul Ted Turner would step down as vice chairman, reported a fourth quarter net loss of $44.9 billion, or $10.04 a share, after taking the non-cash charge to write down the value of its embattled America Online business and other assets. That compared to a year-ago loss of $1.8 billion, or 41 cents a share.
While analysts said overall operating numbers came in near expectations, some expressed disappointment at the size of the charge -- which came on top of a $54 billion charge AOL took in the first quarter.
"The negative was the goodwill writedown of $45 billion, which was bigger than expected, although their debt covenants are still safe because they have to keep at least $50 billion in equity and they finished the year with about $52 billion," said David Joyce, an analyst at Guzman & Co.
Shares of AOL fell to $13 in after-hours trade, after closing at $13.96 in regular New York Stock Exchange trade.
AOL Time Warner posted earnings before a range of items of 28 cents a share, compared to 26 cents a year-ago. This compared to analysts' consensus estimates of 26 cents a share, according to Thomson/First Call.
The company said revenue in the quarter grew 8 percent to $11.4 billion while earnings before interest, taxes, depreciation and amortization (EBITDA) -- a key measure of cash flow --- rose 16 percent to $2.8 billion from a year-earlier for the quarter. Analysts polled by Multex expected, on average, EBITDA of $2.6 billion.
Strength in the company's film/entertainment business, with hits like the "Lord of the Rings" sequel, and cable networks offset weakness in the fourth quarter at America Online, which has been suffering from a sharp slowdown in advertising spending and subscriber growth.
The quarter capped a tumultuous year. About two years after AOL completed its $106.2 billion purchase of Time Warner, the old media veterans from Time Warner are running the show and the key architects of the deal have been forced out amid calls from angry investors that view the merger as a failure.
The company said it sees revenue growth for the 2003 full year in the mid-single digits and said it sees EDITDA to be essentially unchanged to down in the low-single digits.
Earlier on Wednesday, AOL Time Warner said it sold its 8.4 percent stake in Hughes Electronics Corp. GMH.N as part of its efforts to cut its debt load.
The company said it plans to reduce total consolidated debt to approximately $20 billion by the end of 2004.
Turner, AOL's largest individual shareholder and the originator of 24-hour news network CNN who is often called "the mouth from the South," will step down as vice chairman at AOL's annual meeting in May, Chief Executive Richard Parsons told analysts on a conference call.
Turner, in notifying Parsons of his resignation, said he wanted to devote more time to his philanthropic and other interests.
Turner had told cable television executives in November 2001 that he felt sidelined by AOL Time Warner when he was replaced in January 2001 as head of Turner Broadcasting Systems, the unit that includes CNN.
Turner as of the end of July held about 122 million AOL shares.
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