AOL 1Q Profit Jumps Despite Softer U.S. Ad Revenue

By Features FOXBusiness

AOL (AOL) reported much stronger-than-expected first-quarter revenue and profit on Wednesday, though sales fell year-over-year on weaker U.S. premium ads and a decline in subscribers.  

Continue Reading Below

The New York-based Internet and media conglomerate reported net income of $21.1 million, or 22 cents a share, compared with a year-earlier $4.7 million, or 4 cents.

The results beat average analyst estimates of 22 cents in a Thomson Reuters poll.

Revenue for the three-month period was $529.4 million, down 4% from $551.4 million a year ago, topping the Street’s view of $526.5 million.

The improvement was led by a 5% jump in global advertising revenues as global display revenue climbed for the fifth consecutive quarter, partially offset by a slight decline in domestic display ads. Combined AOL properties display and third-party network revenue grew 10% to $240.5 million.

“AOL is a much stronger company today than a year ago and began 2012 by growing advertising revenue, lowering expenses and improving Adjusted OIBDA trends," AOL chief executive, Tim Armstrong, said in a statement.

Continue Reading Below

While AOL continued to lose customers, subscription revenue trends improved with just a 14% decline in subscribers – the lowest rate of decline in five years. 

Monthly average churn of 2% was the lowest rate in seven years.

What do you think?

Click the button below to comment on this article.