AOL LatAm Q2: losses narrow 33 per cent

America Online Latin America Inc.’s revenue dropped during its second quarter, ended June 30, due mainly to weak advertising sales and currency devaluation. However, the company managed to dramatically narrow its net loss thanks to a sharp reduction in cash utilization, the company said Tuesday.

Wall Street reacted negatively to the company’s earnings report, which came out Tuesday morning before the financial markets opened in New York. The stock (AOLA) closed Tuesday at US$0.81 on the Nasdaq SmallCap market, down US$0.08 from Monday’s close. It was still dropping in mid-morning Wednesday, trading at US$0.76.

The Fort Lauderdale, Fla., company, which provides Internet access and content in Latin America, generated US$17.7 million in revenue, down from $18.5 million in last year’s second quarter. Net loss was $29.9 million, or $0.22 per share, down 33 per cent from the net loss of $44.6 million, or $0.66 per share, in last year’s second quarter.

AOL Latin America’s membership rolls again shrunk during the second quarter as the company continues to shed subscribers who either don’t choose a paid plan after their free trial runs out or who don’t pay on time. The company closed the second quarter with about 625,000 members, down 21 per cent from the first quarter. The 625,000-member figure includes an undetermined number of members who are on free trial periods. The downward trend in membership is expected to continue for the remainder of the year, the company said.

AOL Latin America reduced the cash used in operating activities during the quarter by 63 per cent to $14.1 million compared with 2002’s second quarter, by renegotiating better terms with its telecommunications providers for network services and by reducing its network to fit its paying member base. The company now expects its available cash to last it into mid-2004.

AOL Latin America, whose biggest shareholders are AOL Time Warner Inc. and the Cisneros Group of Companies media conglomerate, offers services in Brazil, Argentina and Mexico and serves members of the AOL-branded service in Puerto Rico.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Empowering the hybrid workforce: how technology can build a better employee experience

Across the country, employees from organizations of all sizes expect flexibility...

What’s behind the best customer experience: How to make it real for your business

The best customer experience – the kind that builds businesses and...

Overcoming the obstacles to optimized operations

Network-driven optimization is a top priority for many Canadian business leaders...

Thriving amid Canada’s tech talent shortage

With today’s tight labour market, rising customer demands, fast-evolving cyber threats...

Staying protected and compliant in an evolving IT landscape

Canadian businesses have changed remarkably and quickly over the last few...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now