AOL 4Q Profit Tumbles But Beats on Ad Sales

By FOXBusiness

AOL (NYSE:AOL) narrowed its fourth-quarter profit by 66% but topped Wall Street expectations, as higher display advertising revenue helped to offset continued declines in its Internet dial-up business and growing costs.

The media conglomerate posted net income of $22.8 million, or 23 cents a share, compared with $66.2 million, or 60 cents, in the year-earlier period, ahead of average analyst estimates of 16 cents in a Thomson Reuters poll.

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Revenue for the three-month period was $576.8 million, down 3% from $596 million a year ago, trumping the Street’s view of $573 million.

AOL, which runs the Huffington Post and TechCrunch, said earnings were impacted by an 18% decline in subscription revenue in its dial-up Internet unit, lower search and contextual sales, and higher costs of goods sold.

The declines were partially offset by the third-consecutive period of growth in global display advertising sales, stronger third-party networking revenues and a decrease in general expenses.

"Our Q4 results highlight AOL’s ability to methodically improve our consumer offering and financial performance,” chief executive Tim Armstrong said in a statement.

Churn -- the number of customers that cancel service on a monthly average basis -- edged slightly lower during the period.