AOL Time Warner Inc. (AOL) could fall short of its 2002 financial targets, analysts say, undermining the media powerhouse's efforts to regain credibility with investors after it abandoned financial targets last year.

Despite Chief Executive Richard Parsons' mantra to "underpromise, overdeliver" financial results, analysts believe the America Online unit, which has suffered from sluggish growth and the shadow of federal probes into its accounting, could hold the company back.

"(Parsons) is being forced to guide downward along the way because things were more out of hand then they realized," Jefferies & Co. analyst Fred Moran said. "It appears they are still trying to get a clean grasp on the financial condition of the AOL unit. Until that is solidified, even the most conservative guidance would be vulnerable."

AOL Time Warner, the world's largest media company, is due to report its third quarter results on Wednesday. But investors, wary of a repeat of last year's turn of events when the group had to abandon the aggressive targets it set following its creation via a $106.2 billion merger, are most keen to see the company's outlook for the fourth quarter.

Company executives last year had maintained aggressive targets for months despite an advertising slump that led many of its peers to scale back their expectations, until finally being forced to revise growth projections twice.

Parsons, who took the helm in May, and his new team have been paying the price and struggling to regain credibility.

AOL Time Warner's stock has fallen about 65 percent this year and more than 70 percent since the merger was completed in January 2001. Shares of AOL Time Warner were last up 30 cents at $12.50 in afternoon trading, off from near four-year lows it hit this summer.

The stock drop has caused many investors, including vocal AOL Time Warner board member Ted Turner, to agitate for change. Further declines could lead Turner and others to resume their calls for more management changes.

The company is betting the launch of its latest version of its Internet service, AOL 8.0, and decision to ban third-party pop-up ads on its service will give it some momentum — especially in the holiday-driven fourth quarter.