Analysts cut revenue estimates for AOL TW

Cable World, Jan 7, 2002

Days before AOL Time Warner management is scheduled to hold a conference call discussing the outlook for 2002, two investment banks issued cautious statements regarding the media giant's prospects for the new year.

Morgan Stanley cut by 10% its expectations for 2002 and 2003 growth in earnings before interest, taxes, depreciation and amortization, although the two Morgan analysts who follow the stock have not gone completely negative on the media giant. Concern over subscriber growth at the AOL unit--also a concern at other investment banks in recent weeks--prompted the Morgan analysts to cut revenue estimates by about 1% for 2002.

Sanford Bernstein said in a research note that it expects AOL Time Warner to guide down expectations for 2002 EBITDA to about $10 billion from $11.6 billion, due to continued weakness in the advertising market.