America Online Inc said that it will likely meet analysts’ expectations for revenue, subscriber growth and earnings for the current quarter and full fiscal year. The online services giant told institutional investors on a closed conference call with Morgan Stanley Dean Witter that business is booming and that it has yet to feel the pinch of increased competition. AOL shares took a downturn recently amid fears that rivals such as Microsoft Corp’s MSN service could severely impede AOL’s subscriber and revenue growth with cut-rate pricing.
In its most recent quarter, AOL derived 68% of its overall revenue from subscription fees, leaving the company vulnerable to access pricing pressure, even as it continually expands its revenue streams through e-commerce and advertising. For now, the upbeat news from the company has cheered investors, lifting AOL’s share price a total of $7.75 over the past two trading sessions to $92.75 at the end of the day yesterday. Analysts are expecting earnings of $0.13 per share for the quarter and $0.61 for the full year, up from $0.05 and $0.34, respectively, last year.
