America Online Inc. announced record earnings for the company Tuesday, bolstered by a huge increase in advertising and commerce revenues.
Rev grew to $1.8 billion, a 47% increase from the previous year. This amount includes a $120 million increase in advertising and commerce revenues, which is a growth of 27% in this division over the amount brought in during the second quarter.
The company posted a net income of $271 million for the third quarter ended March 31, a jump of $167 million for the same period last year.
The company’s earnings of 11¢ per diluted share beat the expectations of the First Call/Thomson Financial analysts survey, which predicted that the Internet service provider would post a profit of 9¢ per share.
This was the second earnings report issued by AOL since the proposed AOL/Time Warner merger was announced on Jan. 10.
“This quarter’s results underscore the tremendous strength of America Online’s operations and demonstrate that we are on a clear path to continued strong growth and increased profitability,” said AOL chairman and CEO Steve Case. “Since we announced our landmark merger with Time Warner, we haven’t missed a beat.”
The two companies revealed a number of joint initiatives during the third quarter, including promotions for Warner Bros. movies, Entertainment Weekly being featured on AOL MovieFone and digital downloads of Warner Music being available on America Online’s Winamp and Spinner Web sites.
Investors will have to wait until today to find out how the earnings report will impact AOL’s stock price; the earnings numbers were released after the market closed on Tuesday.
In addition to earnings, AOL announced the company added 1.7 million members over the past three months, pushing the total number of customers to 22.2 million worldwide. The average AOL customer spends a little more than an hour online daily.