NEW YORK -- AOL Time Warner plans to restate two years of financial results because of accounting practices at its America Online unit -- the latest bad news surrounding the troubled Internet division.
The media giant made the announcement Wednesday as it reported third-quarter results, which showed a small profit despite weakness in the online business.
AOL Time Warner said the restatements for the third quarter of 2000 through the second quarter of 2002 would reduce revenues by $190 million.
The revenue adjustments, much higher than the company previously disclosed, follow an internal company review of certain advertising and commerce transactions at the division.
The America Online division has been struggling for months, burdened by declining advertising revenues and a government investigation into its accounting practices. AOL had previously said it may have inappropriately accounted for approximately $49 million in transactions at the online unit.
The changes are expected to be filed with the Securities and Exchange Commission by year's end.
"Although our internal review is ongoing, we do not expect this internal review will result in any further adjustments," said Richard Parsons, AOL Time Warner's chief executive.
Investors were largely unshaken by the news, finding reassurance in the robust performance of other divisions and the company's statement that it believes no additional restatements will be required.
AOL Time Warner's businesses include the cable network HBO, the Warner Bros. film and music companies and Time Warner Cable.
AOL Time Warner shares surged more than 6 percent in extended trading after gaining 3 cents to close at $13.53.
For the three months ending Sept. 30, the media conglomerate earned $57 million, or 1 cent per share, compared with a loss of $997 million, or 22 cents per share, in the same period a year ago. The results were in line with analysts' expectations.
Revenues for the third quarter totaled $9.98 billion, compared to $9.07 billion during the comparable 2001 quarter.
Also Wednesday, AOL Time Warner said it plans a Dec. 3 meeting with analysts to give Wall Street more details about America Online's future business plan.
In August, Jon Miller was named the division's new chief executive and chairman, but Wall Street has remained skeptical -- expressing doubts about whether America Online has the momentum and business plan to continue to grow. Some also blame America Online's troubles for the steep drop in the company's stock price.
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