From Briefing.com: Aol
AMERICA ONLINE INC. (AOL) 71 1/2 CLOSED. Continuing restatements and revisions to past reports is not likely to sit well with investors this morning,
although subscriber growth remains strong. Leading on-line services provider posted a fiscal 4th qtr operating net of $0.09 a share, two cents ahead of the First Call
mean estimate, but restated its fiscal 3rd qtr results to a loss of $0.05 a share from a previous reported net of $0.02 a share. On a net basis, the company lost $0.12
a share in the 4th qtr, versus year-ago net of $0.14 a share as AOL took a charge of $24.5 million in the latest period instead of booking it in the 2nd qtr to better
match the timing of the renegotiated contracts to which the charges correspond. Similarly, the company restated its fiscal 3rd qtr to a loss of $0.05 from a net of
$0.02 a share for better recognition of revenues received in its agreement with Tel-Save Holdings. Revenues in the period surged 42% to $475.7 million from
year-ago level of $334.4 million as its subscriber base increased by 600,000 to 8.6 million. AOL's accounting practices have always been questioned, and the latest
restatement will only lead more investors to continue to question what is real and what is not. That is, on-going revisions cause investors to question every financial
release for reliability and certainty, although the growth in subscribers remains impressive and is probably the saving grace that keeps the stock trading at such a lofty
level, given that the company has yet to consistently show that it can be profitable. AOL's financial are always questionable, to the point in which even its CEO,
Steve Case, is unwilling to say whether this is the last time that such restatements will take place. As long as that uncertainty remains, it is difficult to say with
confidence when the company will actually turn profitable, even though the company is very much on track to reach 10 million subscribers by the end of the current
calendar year. |
