AOL Time Warner has loss; Turner to step down

NEW YORK -- AOL Time Warner reported a staggering fourth-quarter loss of $44.9 billion Wednesday, largely because of the declining value of the world's biggest media company. Separately, the company announced Ted Turner is stepping down as vice chairman.

AOL Time Warner took a $45.5 billion charge to account for the company's plunging value. Without that "goodwill writedown," AOL said its results actually beat Wall Street estimates.

As for Turner, the former cable TV mogul wants to spend more time on his philanthropic endeavors, AOL chief Richard Parsons said.

"He's concluded now is the right time to make more space for his other activities," Parsons said in a conference call with analysts.

Turner told Parsons late Tuesday that he would step down, effective in May.

In the three months ending Dec. 31, AOL said Wednesday it lost $44.9 billion, or $10.04 per share, compared with a loss of $1.8 billion, or 41 cents per share, in the fourth quarter of 2001. Revenue rose 8 percent to $11.4 billion.

Not counting one-time items, AOL said it would have earned 28 cents per share. Analysts had predicted 26 cents per share.

The announcements were made after the markets closed. AOL stock closed higher, up 30 cents per share at $13.96 on the New York Stock Exchange.

Executives said they expect 2003 revenue to grow "in the mid-single-digits" and pre-tax earnings to be flat.

Two years ago AOL and Time Warner announced their $106 billion merger, a crowning moment of the Internet boom. Since then the company has been forced to justify the mega-deal and overcome accounting questions.

The top executives who assembled the merger are gone, including America Online co-founder Steve Case, who announced his resignation as AOL Time Warner chairman this month.

The bright spot has been Time Warner's media properties, which include CNN, Warner Music, Time and People magazines, and the Warner Bros. film division that boasts blockbuster franchises like "Harry Potter" and "Lord of the Rings."

The weak link has been the AOL online division, which now hopes for a jolt from expanding high-speed Internet access and new music, information and shopping services.

AOL Time Warner this week sold its 8.4 percent stake in Hughes Electronics Corp., the parent company of the DirecTV satellite service. Analysts have speculated that AOL will make other cash-raising moves, such as selling its book-publishing division and the Atlanta Braves baseball franchise.

Parsons said he was pleased with the fourth-quarter performance and pledged to "run each of our businesses as well or better than before, with a continued major focus on stabilizing and revitalizing America Online."

The massive writedown disclosed Wednesday follows a $54 billion charge taken in the first quarter to account for the company's stock decline. At the time, it was the biggest quarterly loss in U.S. business history.

For all of 2002, AOL lost $98.7 billion, or $22.15 per share, on revenue of $41.1 billion.