America Online Reports Record Year-End Results
by Jeff Fischer (TMF Jeff)

ALEXANDRIA, VA, (August 7, 1997) -- Online leader AMERICA ONLINE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> announced fourth quarter earnings of $0.09 per share following the close of the market. Estimates stood at $0.07 per share.

Quarterly revenue increased 42% from last year to a record $475 million, with advertising and commerce revenue climbing 415% from last year and 47% from just last quarter, when $54.6 million was earned.

During the quarter 600,000 new members were added, bringing the total to 8.6 million worldwide, as of June 30th. On a subscriber-based valuation, Fools estimate the stock's fair value at $87.50 within 18 months, if AOL's total membership climbs to 10 million over that period.

By the end of June the company had completed its $350 million network expansion, and it now owns over 350,000 modems but still plans to add at least 20,000 more modems per month through the end of the year. Operating momentum continued to improve for all divisions, including ANS, AOL Studios, and, obviously, AOL Networks.

Expansion was the word of the year, and America Online didn't disappoint. From new ventures in Canada, Japan, and Europe, to multiple strategic deals in the United States, America Online is spreading its presence in every direction possible, having emerged as the dominate online player, by far.

For the year sales reached nearly $1.7 billion, up more than 55% from $1.09 billion last year. Due to accounting changes the company lost $5.22 per share, but AOL did turn profitable by the end of the fiscal year, and estimates stand at a positive $0.87 for the current fiscal year. The company ended the year with $124 million in cash and equivalents, compared to $129 million last year.

With $1.7 billion in trailing sales and a current market cap of $8.2 billion, the company trades at 4.8 times sales. The stock closed at $71.50 per share.

For the Full press release, please see the "Company News" link in this special collection. Also, America Online was written of in tonight's Evening News.

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