January 29, 2003 7:19 AM PST

AOL cashes in Hughes stake

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Analysts: No surprises from AOL

January 28, 2003
Looking to lighten its debt burden, AOL Time Warner has sold off its stake in Hughes Electronics, the company confirmed Wednesday.

AOL held about 80 million shares of Hughes, or around 8.4 percent of the company. AOL got the shares as part of a $1.5 billion deal it signed in 1999 with Hughes, the parent company of satellite TV provider DirecTV and a subsidiary of General Motors.

AOL spokeswoman Tricia Primrose said the divestment was part of an overall plan to reduce AOL Time Warner's $26 billion debt load. She did not offer any financial details of the sale. But a Wall Street source said the Hughes stake was offered on the open market for $9.90 per share plus commission by Bank of America. Hughes shares closed Tuesday at $10.45.

AOL is expected to take significant noncash charges on Wednesday when it reports results for the fourth quarter.

The company is expected to report a profit of 27 cents a share, excluding charges, on $11.2 billion in revenue, according to a consensus of analysts polled by First Call.

For all of 2002, analysts project earnings of 87 cents per share, excluding charges, on nearly $41 billion in revenue. If the company reaches that full-year revenue target, it will show improvement from the $38.2 billion reported for 2001.

News.com's Jim Hu and Reuters contributed to this report.

 

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