Speaking at the Deutsche Bank Securities Media Conference this morning, Chief Financial Officer Wayne Pace restated targets of 5% to 8% revenue growth and 5% to 9% growth in earnings before interest, taxes depreciation and amortization.
However, Mr. Pace noted online advertising at the America Online unit will likely lag, he said.
Last to bounce back
"The visibility there
Mr. Pace downplayed a report issued Tuesday by Lehman Bros. analyst Holly Becker, who lowered her estimates for the entire company based on lower expectations of online ad revenue. Ms. Becker forecast a 34% drop in America Online's advertising revenue, to $1.79 billion.
Mr. Pace stood by his earlier forecast of $1.8 billion to $2.2 billion in online ad revenue. The market has bottomed out, he said, but online advertising will bounce back after broadcast and print.
He said Chief Operating Officer Bob Pittman is focused on "addressing the issues on AOL," especially advertising.
As for the rest of the media giant's operations, the second quarter is "ticking up a bit in TV" and publishing ad sales have been strong, said Mr. Pace. He noted AOL had written $100 million more in commitments during this broadcast upfront season over last year, and CPMs, or the cost per thousand viewers, have been at least at the same level as last year's upfront.
The cable upfront, which is just beginning, is expected to perform as well or better, thanks to higher audience numbers for cable networks such as HBO, he said. But he warned the upfront contracts will benefit only the fourth quarter and 2003 ad sales figures.
Additionally, the Time Inc. publishing unit showed positive year-over-year ad sales in May, even after excluding cross-promotions with sister companies, Mr. Pace said.