>>Right now the bears are scared stiff awaiting the earnings report to be released today. It will be an unaudited report, and with the CFO saying that the stock is worth $ 150, watch out bears.<<
BN 5/5 America Online 3rd-Qtr Net Seen at 12c-Share: Earnings Outlook
Technology News
Wed, 6 May 1998, 3:28am EDT
Expected Earnings
America Online Inc. is expected to report a fiscal third-
quarter profit of 12 cents a diluted share, the average estimate
of analysts surveyed by IBES International Inc. That compares to
a restated loss of $4.7 million, or 2 cents a share, in the year-
earlier quarter. Estimates range from 11 cents to 16 cents.
AOL restated its 1997 third-quarter results in August to
account more conservatively for long-term electronic commerce
agreements.
Time
The No. 1 online service is expected to report its earnings
for the quarter that ended March 31 tomorrow after the close of
U.S. stock-market trading.
Behind the Numbers
America Online is expected to see a boost in revenue from
new customers. It won't feel any impact this quarter from a 10
percent price increase, which went into effect April 1. Its
CompuServe unit, the online service acquired in February, is
expected to have a loss of about $1 million, analysts said.
AOL provides access to the Internet and online content for a
flat-rate monthly fee of $21.95. It has 12 million subscribers.
What the Experts Say
''You want to see steady sequential improvement'' in the
company's advertising and electronic commerce revenue, said Henry
Blodget, an analyst at CIBC Oppenheimer, who rates the stock a
''strong buy.''
AOL's strategy is to increase revenue from ads and online
selling since it switched to a flat-rate subscriber fee more than
a year ago.
Blodget expects ad and e-commerce revenue of $117 million,
up from $74.7 million a year ago and $108.8 million last quarter.
He expects revenue from subscriptions to reach $535 million, up
from $381.5 million in the year-earlier quarter.
Previous Market Reaction
America Online's shares rose 5 percent on Feb. 11 after the
company said it added a record number of subscribers during the
fiscal second quarter. It also said it slashed its marketing
expenses, indicating that the company was achieving its goal of
keeping costs in check.
Market Trend
AOL touched a record 91 15/16 today. The shares have surged
52 percent since AOL reported fiscal second-quarter earnings on
Feb. 10, and have almost doubled this year.
Internet companies are on a tear as the potential of selling
over the World Wide Web whets investor appetite for stocks such
as Yahoo! Inc. and online music vendor K-tel International Inc.
Yahoo! rose 16 percent on April 9 after its first-quarter
earnings beat expectations in part from strong e-commerce and ad
sales.
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Investors/Traders: If the past is of any guide, now is the time to reevaluate your positions. You can always make up your mind later.
Oh, BTW, if I remember it correctly from previous press releases, AOL will be using the lower tax rate this quarter as part of its conservative accounting.
As always, good luck!
Beni Mick Mormony
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