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AOLTW cuts AOL's 2002 revenue expectations

Media and entertainment conglomerate AOL Time Warner (AOLTW) has cut its expected 2002 full-year earnings forecast for its AOL...

Media and entertainment conglomerate AOL Time Warner (AOLTW) has cut its expected 2002 full-year earnings forecast for its AOL Internet unit.

The announcement comes as AOLTW faces government investigations by the US Securities and Exchange Commission (SEC) and the US Department of Justice over alleged improprieties in its financial reporting for the AOL unit.

AOLTW says AOL's full-year 2002 advertising and commerce revenues are "tracking" $1.7bn (£1.1bn), "with an additional 5% downside risk". Previously, the company had estimated that the Internet unit would pull in $1.8bn (£1.2bn).

Additionally, AOL's earnings before interest, taxes, depreciation and amortisation (EBITDA) for the full-year are expected to come in at between $1.7bn and $1.8bn, AOLTW said.

However, the company reaffirmed that it was on track for its overall full-year results, stating that EBITDA growth will land at the low end of the previously announced 5% to 9% range, with full-year revenue growth in the 5% to 8% range.

For the third quarter, AOLTW expects revenue growth in the mid-single digits and EBITDA growth to rank in the low-single digits compared to the same quarter last year.

AOLTW's financial results are under particular scrutiny given accusations that the company conducted a series of unusual deals to prop up the performance of its sagging Internet unit. On top of dealing with the investigations, the company has undergone a round of restructuring and executive changes in an effort to shore up its AOL business amid a drifting advertising market.

The company has yet to disclose when it will release its third-quarter results.

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