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Wall Street Expects Big Numbers From AOL

Since its landmark decision to ditch its dying dial-up Web business, AOL has enjoyed three straight quarters of solid growth in online advertising. The Time Warner company is still miles away from offsetting the revenue lost from its ISP business, but Wall Street appears to be happy.

"Time Warner has resuscitated AOL from the dead," said portfolio manager Diane Jaffee of the TCW Diversified Value fund. Her company is the (happy) owner of about 1.3 million shares of Time Warner stock. Indeed, AOL's resurgence has been a major reason for Time Warner's turnaround in the stock market over the past year-share are up 25 percent since then, although recently, the stock has come up flat since January.

Wall Street is expecting happy numbers from Time Warner when it reports second-quarter earnings on Aug. 1, but a closer eye will be paid to AOL. "This is going to be a pivotal quarter for AOL," said Greg Gorbatenko, an analyst with Jackson Securities, who's expecting the company to report between 30 percent and 40 percent advertising revenue growth. AOL reported 40 percent growth in the first quarter.

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