AOL Time Warner Inc. stock rose more than 11 percent Wednesday, fueled by
strong first-quarter results and a federal interest-rate cut.
AOL Time Warner shares closed at $49, up $5.10 per share or 11.62
The company reported a revenue increase of 9 percent to $9.1 billion.
Earnings before interest, taxes, depreciation and amortization, or cash flow,
increased 20 percent to $2.1 billion.
On the cable side, Time Warner Cable reported revenue of $1.6 billion, up 12
percent from $1.4 billion a year ago. Cash flow at the cable operations was $768
million, up 15 percent from $666 million in 2000. During the quarter, the MSO
added 400,000 digital subscribers for a total of 2.1 million and 237,000
high-speed Road Runner subscribers for a total of 1.2 million.
At the company's networks -- including TBS Superstation, Turner Network
Television, Cartoon Network and The WB Television Network -- revenue climbed 6
percent to $1.7 billion, while advertising and commerce revenues rose just 1
percent to $589 million. EBITDA grew 34 percent to $449 million, up from $335
million last year.
In a conference call with analysts, AOL Time Warner CEO Gerry Levin said the
company was on track to achieve its goals of $40 billion in revenue and $11
billion in cash flow by year's end.
Advertising and commerce revenue was up about 17 percent on the
cable-operations side -- a fact Levin attributed to the growth in local
advertising and AOL Time Warner's ability to offer multiple platforms for
'Against all other forms of local advertising -- including newspaper, radio
and broadcast television -- local cable has an advantage,' he