AOL will lose (.38) a share next quarter ...
All things being equal (i.e number of subscribers, costs, etc.), AOL would have lost (.38) a share vice a gain of .14 last quarter due to their new pricing policy of $19.95 for 20 hours and $2.95 an hour above that. Calculations are as follows (read in two colums, I realize this is going to get scrambled and be hard to read but the numbers are there):
Constants
# of users = 6,200,000
heavy use per customer cost = $73.45
calc for above = (101,057,000-(6200000*0.9*9.95))/(6200000*0.1)
# of hours for heavy users = ((73.45-9.95)/2.95) + 5 = 26.52
# of hours above 20 = 6.52
# of shares = 112000000
rev/costs per month This Qtr (avg/month) 1st Qtr end 31 Sep 96
5 hr users (90%) $55,521,000 $55,521,000
Heavy users (10%) $45,536,000 $24,301,000
Heavy use calc for 31 Sep 96 =(6200000*.1*19.95+(6.52*2.96))
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online rev $101,057,000 $79,822,000
other rev $10,432,000 $10,432,000
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Total rev $111,489,000 $90,254,000
Total costs ($100,711,667) ($100,711,667)
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profit $10,777,333 ($10,457,667)
other costs ($5,333,333) ($3,666,667) *note this will be less because last qtr reflected 5 million dollar legal
settlement
total profit $5,444,000 ($14,124,333)
qtr profit $16,332,000 ($42,373,000)
EPS per qtr $0.15 ($0.38) |
