Media and Internet conglomerate says SEC probe has found some accounting was not correct.
July 23, 2003: 6:22 AM EDT
NEW YORK (CNN/Money) - AOL Time Warner reported a better than expected gain in revenue and a $2 billion reduction in debt Wednesday, but said the Securities and Exchange Commission continues to believe that accounting for two deals was not correct.
The company, which owns CNN/Money, earned net income of $1.1 billion, or 23 cents a share. That compares with $394 million, or 9 cents a share, earned from continuing operations a year earlier. But the most recent period included a number of special items so it was not clear how the company performed compared to the forecasts of analysts.
Revenue rose to $10.8 billion from $10.2 billion a year earlier. Analysts surveyed by First Call were forecasting revenue of $10.6 billion in the period.
AOL Time Warner said it cut its net debt, which reflects long-term debt less cash and cash equivalents, to $24.2 billion at the end of the quarter from $26.3 billion three months earlier, greatly through the sale of assets and the settlement of litigation with Microsoft Corp.
The company did say that the SEC continues to investigate a range of transactions related to its America Online division, and that the staff of the regulatory agency has informed the company that its accounting for two related transactions between America Online and Bertelsmann was not correct. The company said its staff continues to believe it was correct in its accounting, but said that its own ongoing investigation may cause that view to change.
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