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AOL Posts Strong Quarterly Revenue on Advertising Growth

AOL Posts Strong Quarterly Revenue on Advertising Growth

By Reuters | Updated: 6 August 2014 20:38 IST

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Digital media and entertainment company AOL Inc reported better-than-expected quarterly revenue, helped by a 60 percent jump in advertising revenue in its third-party platform.

AOL, whose shares were up nearly 4 percent in premarket trading, also said it approved a $150 million share buyback program.

Advertising has become a major revenue stream for AOL, the owner of the Huffington Post news website and the TechCrunch blog, especially as the company moves away from dial-up subscription service.

Advertising revenue increased 20 percent to $451.7 million, in the second quarter ended June 30, helped by the acquisition of video advertising platform Adap.tv and increased "programmatic" advertising.

Advertising revenue from AOL's third party platform, which includes "programmatic" and advertising offerings to marketers and publishers, jumped to $194.3 million.

"Programmatic" advertising helps buy and sell online ad spots through bidding via computers, based on a set of pre-decided rules.

Total revenue rose 12 percent to $606.8 million from $541.3 million. Analysts on average had expected $595.5 million, according to Thomson Reuters I/B/E/S.

Net income attributable to AOL fell to $28.2 million, or 34 cents per share, for the second quarter ended June 30, from $28.5 million, or 35 cents per share, a year earlier.

Excluding items, it earned 45 cents per share, a cent more than analysts' average expectation.

Results were hit by a $7.4 million increase in amortization of intangible assets and another $7.2 million rise in stock-based compensation, AOL said.

AOL shares closed at $39 on the New York Stock Exchange on Tuesday. They have fallen 11.2 percent since the company announced disappointing first-quarter results in May.

© Thomson Reuters 2014

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