Fourth-quarter losses at the struggling media conglomerate soared as it took a staggering $45.5 billion charge to account for the company's plunging value. Take out that goodwill write-down, though, and, according to the company, its results actually beat Wall Street estimates.
In the three months ended Dec. 31, AOL Time Warner lost $44.9 billion, or $10.04 per share, compared with a loss of $1.8 billion, or 41 cents, in the fourth quarter of 2001.
Revenue rose 8%, to $11.4 billion, fueled by 10% growth in subscription revenue and content and other revenue. Ad and commerce revenue fell 1% because of declines at America Online.
Not counting one-time items, AOL Time Warner says it would have earned 28 cents per share. Some analysts had predicted 26 cents, with revenue of $11.2 billion.
The goodwill write-down comes on top of a $54 billion charge taken in the first quarter to account for the company's stock decline. That move at the time gave AOL Time Warner the biggest quarterly loss in U.S. business history.
For all of 2002, AOL Time Warner lost $98.7 billion, or $22.15 per share, on revenue of $41.1 billion. In 2001, the company lost $4.9 billion, or $1.11 per share, on revenue of $38.5 billion.
Execs say Wednesday they expect revenue this year to grow in the mid-single digits, and that earnings before taxes, depreciation, and amortization will be essentially flat.
Two years after AOL and Time Warner's $106 billion merger, the company has been forced to justify the rationale for the deal, overcome questions about its accounting and plot a massive turnaround. The top execs who assembled the merger are gone, including America Online co-founder Steve Case, who announced his resignation as AOL Time Warner chairman this month.
Though Time Warner's media properties have been a bright spot, the AOL online division has struggled. It's hoping for a boost from expanding high-speed Internet access and the rollout of new music, information, and shopping services.
The company announced separately that Ted Turner is stepping down from his role as AOL Time Warner's vice chairman. The former cable-TV mogul wants to spend more time on his philanthropic endeavors, AOL chief Richard Parsons said.
"He's concluded now is the right time to make more space for his other activities," Parsons said in a conference call with analysts. Turner told Parsons late Tuesday that he would step down, effective in May.
AOL Time Warner this week also sold its 8.4% stake in Hughes Electronics Corp., the parent company of the DirecTV satellite service.
Parsons says he's pleased with the fourth-quarter performance and pledges to "run each of our businesses as well or better than before, with a continued major focus on stabilizing and revitalizing America Online."