AOL Time Warner Chief Executive Richard Parsons consolidated his power atop the world's biggest media company today, as the corporation's board of directors unanimously elected him to begin serving as chairman once Steve Case's resignation from that post becomes effective in May.
The only hurdle to naming Parsons to the chairman's job had been the renewed emphasis recently on splitting the jobs of chairman and chief executive officer as part of improved corporate governance practices. But several members of AOL Time Warner's board of directors serve as both chairman and chief executive of the corporations they run and find it an effective way to manage. Naming Parsons was also seen, sources said, as a way to "heal" rifts.
"I am delighted by this decision and look forward to working with Dick to ensure a smooth transition," said Case, who will remain a member of the AOL Time Warner board of directors.
"I am highly gratified that the board shares my determination to maximize AOL Time Warner's tremendous potential," Parsons said. "As we address the challenges facing our company and the industries in which we operate, I will work together with the extraordinary people in this company to focus on increasing value for our customers and our shareholders."
The company did not say what additional compensation Parsons would receive for serving as chairman. Case has been paid $1 million annually for doing the job.
News source: Washington Post - Parsons Tapped as Next AOL Time Warner Chairman
The only hurdle to naming Parsons to the chairman's job had been the renewed emphasis recently on splitting the jobs of chairman and chief executive officer as part of improved corporate governance practices. But several members of AOL Time Warner's board of directors serve as both chairman and chief executive of the corporations they run and find it an effective way to manage. Naming Parsons was also seen, sources said, as a way to "heal" rifts.
"I am delighted by this decision and look forward to working with Dick to ensure a smooth transition," said Case, who will remain a member of the AOL Time Warner board of directors.
"I am highly gratified that the board shares my determination to maximize AOL Time Warner's tremendous potential," Parsons said. "As we address the challenges facing our company and the industries in which we operate, I will work together with the extraordinary people in this company to focus on increasing value for our customers and our shareholders."
The company did not say what additional compensation Parsons would receive for serving as chairman. Case has been paid $1 million annually for doing the job.
News source: Washington Post - Parsons Tapped as Next AOL Time Warner Chairman
"We are in the camp of saying that if the shift happens, it will take longer than most people think." Microsoft comments on its earnings call that technology spending was unlikely to recover soon -- and its argument that high-end markets feel the spending pinch most -- had hurt Sun, Shagrin said.
Sun shares fell in after hours trading to $3.49 on Instinet. They had closed down 4.39 percent, or 17 cents, to $3.70 on Nasdaq before the results were announced.
Sun reported a net loss of $2.28 billion, or 72 cents a share, in its fiscal second quarter ended December 29, versus a year-ago net loss of $431 million, or 13 cents a share.
Revenue was $2.92 billion after $3.11 billion in the year-ago quarter.
SURPRISE OPERATING PROFIT
Excluding one-time items, Sun reported a profit of $10 million, or nil cents a share. Analysts polled by Wall Street tracking firm Thomson First Call had forecast Sun would post a loss of 2 cents per share on revenue of $2.91 billion.
The one-time items in part were a $2.1 billion non-cash charge for acquisition-related write-offs, $357 million in expenses related to job cuts and restructuring costs and $204 million in tax benefits.
CFO McGowan described in a conference call various factors affecting March quarter results, from beneficial accounting issues to a pay raise and higher component prices the company.
But he gave no earnings or profit margin forecast and said he would not provide a midquarter update, breaking from the computer maker's recent practice.
Analyst Richard Chu of SG Cowen said Sun's guidance had not been precise of late, anyway. "By no means should the uncertainty equate to a black hole," he said.
He said he was still neutral on the stock after listening to executives in a conference call and that he did not expect Wall Street estimates for the year to change much. First Call puts the third-quarter consensus at a 1-cent-per-share loss on revenue of $2.98 billion.
Sun's first-quarter gross profit margin, a reflection of unit pricing which is closely watched by investors, rose by 2.1 percentage points from the previous quarter, to 43.3 percent from 41.2 percent.
McGowan said that better pricing and a mix of sales weighted toward its most expensive computers, as well as lower component costs, accounted for the bulk of the improvement.
Shares of Sun, which rode the Internet wave by supplying computers to dot-coms in boom years and then suffered in the bust, fell 75 percent last year, more than double the 36 percent fall of bigger and more diversified rival IBM.
Both have shown double-digit improvement so far this year.
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