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For a while, AOLTW’s many assets have helped it through this period of decreased ad spending. However, doubts now are arising about whether or not the company will reach its $40 billion revenue target for the year.
AOL TIME WARNER REPORTS DISAPPOINTING REVENUES
Slow Growth Blamed On Decreased Ad Sales, Lack Of Fertilizer, Poor Irrigation
AOL Time Warner today said its second quarter earnings, excluding a range of costs, rose thanks to company cost-cutting, but still experienced slower-than-anticipated revenue growth. The disappointing results have been attributed to an advertising slump, due to an economic slowdown. Thank you very much, George W.

Revenues rose 3% to $9.2 billion from $8.9 billion, below Wall Street consensus estimates of $9.74 billion.

For a while, AOLTW’s many assets have helped it through this period of decreased ad spending. However, doubts now are arising about whether or not the company will reach its $40 billion revenue target for the year.

In response to the news, the company's shares fell $4.44 to $45.01 in early trading Wednesday.

AOL Time Warner said in a statement its cash earnings, excluding amortization of goodwill and charges, grew to 32 cents a share, compared with 23 cents last year. Wall Street analysts expected the company to post earnings within a range of 14 cents and 32 cents a share, with a consensus estimate of 28 cents, which also notes that you can still buy a 29 cent hamburger at McDonald’s with all this loose change.

AOL Time Warner said its ever-popular EBITDA grew 20% to $2.5 billion. Including goodwill amortization costs, the company posted a net loss of $734 million (17 cents a share), compared to a net loss of $924 million (22 cents a share) last year.

Year-earlier results were reported on a pro-forma basis, assuming that AOL's $106.2 billion purchase of Time Warner was complete at that time.

Meanwhile, AOL Time Warner's subscriptions revenues grew 10 percent, though its overall ad and commerce revenues grew only one percent to $2.3 billion. Revenue within some of the company's units grew slower than expected by analysts.

AOL’s quarterly revenues grew 13% to $2.1 billion from $1.9 billion last year. Its EBITDA rose 37% to $801 million, thanks to increased operating efficiencies and reduced network costs per hour, among other factors (such as the annual car wash and bake sale).

Warner Music Group's revenues fell 11% to $895 million, amid lower music sales industrywide and unfavorable currency exchange rates. EBITDA dropped 33% to $87 million, due to sagging revenues, the increased marketing costs to invest in emerging artists and the company’s increased spending on candy and video games.

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