AOL Time Warner has claimed the dubious distinction of posting what is among the worst losses in corporate history. The company posted a loss of more than US$54 billion (thatis with a "b" and not an "m"), but that loss is largely a loss on paper that stems specifically from changes in accounting rules. The Washington Post has an outstanding report from which we quote:
Yesterdayis results reaffirmed that AOL is dragging down the companyis overall results. For the three-month period ended March 31, the New York company reported a net loss of $54.24 billion ($12.25 per share), compared with a loss of $1.37 billion (31 cents) in the comparable period last year. The huge number -- a paper figure arising from new accounting rules about how to handle goodwill -- has no bearing on the companyis cash flow or day-to-day operations.
Excluding one-time items, AOL Time Warner reported a profit of 18 cents, up from 16 cents a year earlier. The per-share results were 4 cents above analystsi expectations, according to a survey by investment research firm First Call/Thomson Financial.
Revenue for the quarter rose 4 percent, to $9.76 billion, from $9.43 billion the previous year. That was slightly better than analystsi target of $9.4 billion, and it exceeded the companyis guidance earlier this year when it said it expected no revenue growth.
The company had also expected flat growth in earnings before interest, taxes, depreciation and amortization, a common measure of profitability. But on that score, the company did better, as EBITDA increased to $2.05 billion, from $1.98 billion.
The results helped Parsons, the chief executive-designate, carry out his pledge to under-promise and over-deliver on financial results, which the company had fail to do recently in earlier quarters. AOL Time Warner, however, lowered its full-year EBITDA growth target to between 5 percent and 9 percent, down from a range of 8 percent to 12 percent, blaming the weak online advertising business.
There is a lot more information concerning rumors that AOL itself might be spun off from the company, and other industry issues in the full story. Itis a very good read.