AOL Time Warner 2001 Results – Revenue Up, Losses Deepen

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AOL Time Warner's 2001 revenue grew modestly despite $4.9B losses, with booming film sales and subscriber growth; advertising challenges persisted, but strategic integration aimed to capitalize on opportunities.

Despite deepening losses reaching $4.9 billion for 2001, AOL Time Warner managed modest revenue growth of 6%, climbing to $38.2 billion.

The film division emerged as a powerhouse, dominating the industry with $1.8 billion in U.S. box-office receipts.

Blockbusters like "Harry Potter" and "Lord of the Rings" fueled a strong fourth quarter, while Warner Home Video surged 57% in unit sales to 116 million DVDs.

AOL's subscriber base grew robustly by 20%, exceeding 33 million users, and Time Warner Cable revenues rose 18%.

However, Warner Music struggled, seeing revenues drop 5% amid piracy concerns and market weakness.

Advertising proved the major drag, sinking 3% annually with a steep 14% Q4 plunge, offset only by cable ad growth of 32%.

Executives acknowledged ad markets would likely remain weak but emphasized their readiness to gain share if conditions improved.

New CEO Richard Parsons outlined a unified strategy, stressing integration across AOL TW's 148 million subscribers.

Bob Pittman highlighted cross-promotion successes, noting the "Harry Potter" marketing blitz on AOL drove record advance ticket sales.

Broadband expansion remains central, targeting services like video-on-demand and gaming through cable partnerships.

While holding to 2022 projections of 5-8% revenue growth, the company anticipates a massive $40-$60 billion accounting charge in Q1.

This stems from revised rules forcing immediate write-offs of merger premiums from the AOL-Time Warner deal.

Wall Street reacted tepidly, sending shares down 1% to $26.40 near yearly lows.

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