AOL posts smaller 2Q net loss

Ad revenue grows for first time since 2008

Internet company AOL Inc. reported smaller net loss for the second quarter on Tuesday even though revenue fell. The year-ago results were weighed down by a huge accounting charge.

AOL’s advertising revenue grew for the first time since 2008, in what CEO Tim Armstrong said reflects “another meaningful step forward in the comeback of the AOL brand.”

The company has been working on turning its business around as demand for its old dial-up Internet service fades. To this end it bought the Huffington Post earlier this year for $315 million, along with the technology blog TechCrunch last year.

“We have cleaned up and simplified our operations,” Armstrong told analysts in a conference call. “We’re witnessing encouraging metrics in key growth areas and we’re seeing the beginning of this manifest in our reported numbers.”

Investors, though, weren’t as impressed, and the company’s shares dropped $2.31, or 15.3 percent, to $12.75 in morning trading.

They may have been focusing AOL’s weaker-than-expected display advertising and search ad revenue in June. Chief Financial Officer Arthur Minson said AOL’s search advertising trends “got a little bit weaker as we moved through the quarter.”

AOL posted a net loss of $11.8 million, or 11 cents per share, in the three months that ended June 30. A year ago it lost $1.06 billion, or $9.89 per share. That was due largely to write-downs of $1.41 billion for the declining value of its assets and the sale of social networking site Bebo.

In the latest quarter, AOL booked special items totaling 15 cents per share. Excluding these, the company would have earned 4 cents per share.

Revenue fell 8 percent to $542.2 million from $592.2 million. Analysts had expected lower revenue of $535.1 million, according to a poll by FactSet.

Advertising revenue grew 5 percent to $319 million, helped by AOL’s acquisition of Huffington Post.

Subscription revenue fell 23 percent to $201.3 million as fewer people paid to access AOL’s waning dial-up service.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Digital News from Variety

Loading