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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Clint E. who wrote (22216)	7/21/1999 9:21:00 PM
From: Clint E.	Respond to of 69854

America Online's 4th-Quarter Profit Rises as Memberships, Advertising Soar By Aimee Picchi AOL 4th-Qtr Profit Rises as Membership, Ads Surge (Update2) (Adds details, company comment in 6th, 11th-16th paragraphs.) Dulles, Virginia, July 21 (Bloomberg) -- America Online Inc., the world's largest Internet service, said its fiscal fourth-quarter profit more than doubled as it signed up 755,000 new subscribers and advertising revenue surged. AOL earned $156 million, or 13 cents a share, in the quarter ended June 30, compared with a pro-forma profit of $58 million, or 5 cents, a year ago. Revenue jumped 46 percent to $1.38 billion from $943 million. America Online is outpacing its rivals in the fight for new subscribers, even with a slowdown during the summer, when consumers spend less time at their computers. The surge in new members helped AOL boost revenue from advertisers, who want to sell good and services to its nearly 18 million customers. ''AOL is getting more money from the (advertising) side of the business, and that bodes well for them,'' said Standard & Poor's Equity Group analyst Mark Cavallone, who expected AOL to report about $1.35 billion in revenue. ''You're seeing advertisers getting attracted to that large subscriber base.'' AOL was expected to earn 11 cents a share, the average estimate of analysts polled by First Call Corp. Its profit met the so-called whisper number, the latest unpublished forecast, of 13 cents a share. ''We expect to have another record year coming up,'' said Chairman Steve Case on a conference call. ''We expect to see very robust growth in AOL membership. Our other brands are also well positioned for very strong growth.'' The Dulles, Virginia-based company has signed scores of large advertising agreements with companies spanning several years. In February, for example, it said it signed a five-year agreement, worth as much as $500 million, with Bank One Corp.'s First USA unit to market credit cards to AOL subscribers. AOL has sought to increase its revenue from marketing alliances and electronic commerce since it shifted to a flat-rate subscription in 1996. AOL said revenue from advertising and electronic commerce almost doubled to $306 million from $164 million in the year- earlier quarter. Its backlog of advertising and e-commerce revenue rose to $1.5 billion from $1.3 billion at the end of the prior quarter. The backlog represents the revenue that AOL expects to record in future quarters from its multiyear agreements. Time Online AOL said its members spent an average of 52 minutes each on its flagship service every day, compared with 44 minutes a day a year ago. Revenue from its monthly subscription fee was $943 million from $676 million a year earlier. Its CompuServe service had about 2 million subscribers at the end of the quarter. America Online's Case said the company is planning to start more online services in other countries, although he didn't disclose details. The company had more than 3 million international subscribers at the end of the quarter. AOL said earlier this week that it's starting a free Internet service in the U.K. to compete with Dixons Group Plc's Freeserve, which leapfrogged AOL to steal the No. 1 spot in the U.K. in three months of running. ''If someone can make money in a market segment, we should be able to make more money,'' said AOL President Bob Pittman on the conference call. ''We didn't pioneer service (the free ISP service) in the U.K., but we figured out a good way for us to jump into the market.'' The free Internet access model works in Britain because the phone companies share revenue from per-minute charges with the ISP. Consumers in the U.K. end up paying the company for their monthly per-minute Internet use, while users in the U.S. pay their Internet service a flat-rate monthly fee. America Online doesn't expect to create a free ISP service in the U.S. ''We don't think a free ISP in the U.S. is likely to be successful,'' Case said. Including $15 million in acquisition costs, AOL said its net income was $160 million, or 13 cents a share, for the fiscal fourth quarter. For the fiscal year ended June 30, the company had net income of $762 million, or 60 cents a share. That compares with a loss of $74 million, or 8 cents a share, for its prior fiscal year. Revenue rose 54 percent to $4.78 billion from $3.1 billion. The full-year and fiscal 1998 pro-forma results are stated as if AOL's $10.2 billion acquisition of Netscape Communications Corp. in March had been completed before those periods. AOL shares today rose 1 7/8 to 115 1/16. The company released its earnings report after the close of regular U.S. trading. In trading after the close of U.S. markets, AOL shares rose as high as 117. ========---------========---------========---------