AOL selloff drives Bertelsmann gain
Company reports upbeat numbers
AOL Time Warner was forced to buy back Bertelsmann's 49% stock in AOL Europe for $6.75 billion in cash. Proceeds more than offset the impact of a slower economy and dip in advertising that hit media companies before Sept. 11 and then got worse, said CEO Thomas Middelhoff. Bertelsmann's book and music clubs in particular, which live through direct mailings, were devastated by the anthrax scare in the U.S. last fall.
A cost-cutting and streamlining program launched last spring also helped boost earnings, Middelhoff added, noting asset sales and revamping at European TV giant RTL and magazine publisher Gruner+Jahr.
Bertelsmann reported numbers for the six months ended Dec. 31 as an abbreviated fiscal year. The company is switching to a calendar year and also has adopted international accounting standards ahead of an eventual initial public offering. Its fiscal year previously ended June 31. As a result, it didn't provide year-earlier figures, which it said aren't comparable.
Without extraordinary items (including Internet losses), Bertelsmann earned $185 million during the period. Revenue was $8.5 billion.
Bertelsmann, which recently shelved plans to take RTL private, said TV, radio and sports rights now make up 50% of its assets. It owns music label BMG Entertainment and book publisher Random House.
