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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: CGarcia who wrote (32767)	10/18/1999 2:43:00 PM
From: puborectalis	Respond to of 41369

Technology News Mon, 18 Oct 1999, 2:40pm EDT America Online 1st-Qtr Profit Seen Rising on Subscriber, Advertising Gains By Aimee Picchi America Online 1st-Qtr Profit Seen Rising on Subscriber Gains Dulles, Virginia, Oct. 18 (Bloomberg) -- America Online Inc., the largest Internet service company, is expected to post higher fiscal first-quarter earnings Wednesday, helped by increased advertising revenue and a million new subscribers. Profit is forecast at 13 cents a share, in the quarter ended Sept. 30, compared with a pro forma 6 cents in the year-earlier period, according to the average estimate of analysts surveyed by First Call Corp. America Online said last month it expected to meet analysts' profit and subscriber estimates. Some Web sites that track profit estimates say AOL may earn 15 cents. The Dulles-Virginia-based company has said that it's on track to gain more subscribers than the 951,000 it added in the year-earlier quarter. America Online has been parlaying that user base, which is nine times larger than its closest competitor, into ad revenue from companies like American Greetings Corp., which are eager to target the largest audience on the Internet. ``AOL is remaining competitive as the premier brand in the Internet,' said Jim Preissler, an analyst at PaineWebber Inc., who has a ``buy' rating on the company. ``AOL is like Coke. Microsoft looks like it wants to be Pepsi, and several others want to be RC Cola.' AOL's shares dropped 5.4 percent in the past quarter, partly on concern that No. 1 software company Microsoft Corp. would cut or eliminate fees on its MSN service, the second most widely used after AOL with about 2 million subscribers. Instead, MSN said last month it would raise fees to match AOL's monthly rate of $21.95, helping to ease concern about a price war. Still, AOL is facing increased competition from rivals such as Excite At Home Corp., which offer high-speed Internet access through cable-television lines. While Internet cable-modem usage remains small, it could increase in popularity over the next few years, analysts said. ``Cable is still a big issue but helping the process is that cable deployment hasn't accelerated,' said Preissler. ``They're not losing any ground to cable.' Advertising Revenue America Online had a profit of $76 million, or 6 cents a share, in the year-earlier quarter. Those results are stated as if the company's $10.2 billion acquisition of Netscape Communications Corp. in March had already taken place. In the recent quarter, the company is expected to have revenue of $1.44 billion, up from $999 million in the year- earlier period. Electronic-commerce and advertising should generate about $324 million in revenue, up from $143.3 million in the year- earlier. The company has signed several advertising agreements, including one in August with American Greetings valued at $100 million. AOL said the number of its subscribers who shop online doubled to more than 11 million in August from about 5.5 million in July 1998 because consumers have become more comfortable with purchasing over the Internet. America Online runs an online mall that charges rent to retailers such as Gap Inc. The company is expected to release earnings after the close of trading on U.S. exchanges on Wednesday.