Lehman Brothers cut its first-quarter revenue and cash flow estimates on media giant AOL Time Warner today and cited concerns over the America Online Internet divisions advertising.
Analyst Ms Holly Becker said she hoped the company's original forecast - 5 per cent to 8 per cent growth in revenue and 8 per cent to 12 per cent growth in cash flow in 2002 - was a worst-case scenario.
"However, despite early signs of firming on the macro advertising front, AOL division advertising continues to face company-specific challenges," she wrote.
Ms Becker's full-year revenue estimate was cut to $41.4 billion, 5.6 per cent growth over last year, and her cash flow estimate was $10 billion, up 7.3 per cent, below the company's guidance. Her previous estimates were not immediately available.
She cut the AOL division's first-quarter advertising revenue estimate to $535 million, a 40 per cent decline from a year ago excluding intercompany revenues.
She trimmed her AOL division revenues in the first quarter to $2.3 billion, a year-over-year increase of 1.9 per cent. She cut her AOL division cash flow estimate to $449 million, down 11.5 per cent drop over last year.
Ms Becker cut AOL Time Warner's overall first-quarter revenue estimate to $9.4 billion, an increase of 0.8 per cent from a year ago. Her first-quarter cash flow estimate was cut to $2.0 billion, a 1.6 per cent increase from last year.