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Markets poised for AOL profit warning

Media giant set to start next week on a bum note...
Written by Joey Gardiner, Contributor

Media giant set to start next week on a bum note...

Speculation is mounting that AOL Time Warner will unleash a profit warning on Monday at a hastily arranged investor conference call. Three separate investment banks, Lehman Brothers, Deutsche Bank Alex Brown and Sanford Bernstein, have each issued statements indicating they believe the media giant is to lower earnings expectations. AOL Time Warner announced the conference call last week to discuss "plans and outlook for the new year". Analysts cite continued weakness in the advertising market for their caution in assessing AOL Time Warner's prospects. Increasing pressure on the group's cable operation is forcing it to look at new ways of getting more revenue from existing customers. Glen Britt, CEO of Time Warner Cable, told Bloomberg he wants new services, such as video on demand, to quadruple revenues from its current customer base. At the end of last year AOL lost a bidding war with Comcast for AT&T's broadband division, leaving it with just half the subscribers of the new cable giant.
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