AOL Latin America gets cash infusion
The Internet service provider receives $150 million from principal shareholders and reports a smaller-than-expected loss for its second quarter.
The company also reported a smaller-than-expected loss for its fiscal second quarter.
AOL Latin America provides Spanish- and Portuguese-language versions of AOL-branded interactive services in Brazil, Mexico and Argentina.
AOL Latin America said that its two principal shareholders--AOL Time Warner subsidiary America Online and the Cisneros Group--along with Brazilian bank Banco Itau will provide $150 million in added capital on terms to be established by the parties.
According to the company, AOL and the Cisneros Group will invest around $130 million in preferred stock and Banco Itau will invest the remainder in class A common stock. Through Dec. 31, AOL Latin America had $63.5 million in cash and equivalents and $69.3 million in short-term investments.
AOL Latin America also reported earnings for its fiscal second quarter, posting a loss of $101.8 million, or 35 cents a share, on revenue of $7.9 million. The loss was slimmer than First Call analysts' estimated loss of 42 cents a share.
Sequentially, the company's loss was a penny smaller than that seen in the first quarter. Revenue rose 74 percent over the previous quarter's total of $4.6 million. There are no comparable prior-year results because the company's first services were launched in November 1999.
The company also said that membership in its services surpassed 550,000, a jump of 141,000 from September of last year. The total includes members of services in Brazil, Mexico, Argentina and San Juan, Puerto Rico, as well as members participating in free trial promotions.
The bulk of AOL Latin America's sales derive from subscription fees. Advertising and commerce revenues totaled $2.5 million in the quarter, a 29 percent increase from $1.9 million in the September quarter.