In the wake of its planned US$350 billion merger with Time Warner Inc. announced last week, America Online Inc. (AOL) today reported strong second-quarter earnings for fiscal 2000.
For the quarter ending Dec. 31, 1999, the ISP (Internet service provider) reported net income including one-time items of $271 million, or 10 cents per share, compared with net income of $115 million, or 5 cents per share, for the year-earlier quarter, the company said in a statement issued today. The one-time items include a pretax gain of $111 million resulting from AOL's investment in Sandpiper Networks, which was bought by Digital Island last month.
Excluding the one-time items, AOL would have recorded net income of $224 million, or 9 cents per share, as opposed to $86 million, or 4 cents per share, in the second quarter of fiscal 1999.
Revenue for the second quarter of fiscal 2000 soared 41 percent to reach $1.6 billion, up from $1.1 billion for the year-earlier quarter.
By the end of the quarter, AOL had notched up a total of 23.8 million subscribers for its range of services, with the AOL-branded service itself adding 1.8 million new members during the three-month period. CompuServe 2000 grew its membership by 440,000 subscribers, while AOL gained over 740,000 subscribers for Gateway.net, via an agreement the company signed with PC vendor Gateway Inc. for AOL to act as its custom ISP. AOL's ICQ real-time chat service gained 7.9 million users during the quarter, bringing its total membership to 53.1 million, 17.9 million of which are active users, the company said.
AOL and Time Warner took the IT world by surprise last week with their announcement of a planned merger in an all-stock deal valued at $350 billion.
[See "UPDATE2: AOL to Merge with Time Warner for US$350B," Jan. 10.] The new company will be called AOL Time Warner Inc. and have combined revenues of more than $30 billion.
AOL, in Dulles, Virginia, can be reached at +1-703-448-8700 or at http://www.aol.com/.