Wednesday proved to be another black day for AOL Time Warner as it reported the largest annual loss in corporate history and announced the departure of vice-chairman Ted Turner.
Declining revenues at America Online took their toll and management was forced to write down the value of the ISP by $45.5 billion in Q4. This hefty charge, far higher than anticipated, contributed to a full-year deficit of $98.7 billion across the company.
Overall, earnings before interest, tax, depreciation and amortisation increased by 5% to $9.1 billion and revenues were up 7% to $41.1 billion. However, these gains were overshadowed by the crisis in the online division which has been afflicted by the downturn in internet advertising. Earnings fell by over a fifth from $2.3 billion to $1.8 billion during 2002.
The resignation of Turner came as a surprise although the media tycoon has reportedly been critical of management policy at AOL Time Warner (see AOL Chief To Take More Active Role). He will step down in May to pursue philanthropic interests but expressed confidence that the company “will be able to move forward and reach its true potential”.
Turner’s abdication comes on top of the news that Steve Case is to quit as chairman following pressure from shareholders (see AOL Chairman Quits Following Shareholder Unrest). Dick Parsons will now orchestrate strategy at AOL TW (see AOL Time Warner Puts Faith In Old Media) and his first task will be to reduce the $26 billion debt mountain. It is expected that upwards of $800 million will be raised through the sale of the company’s 8.4% stake in Hughes Electronics (see AOL Sells Hughes Stake For $800 Million)
