Shares of AOL Inc. (NYSE: AOL), a global web services company with a range of brands and offerings, have risen sharply in early trading today after the New York City-based company reported better-than-expected results for the first quarter of 2012. AOL’s results beat Street estimates despite weaker ad revenue in the U.S.
AOL shares are currently trading 4.03% higher at $26.62. The stock rose to a high of $26.76 in early trading.
AOL reported first-quarter revenue of $529.4 million, down 4% over the same period in the previous year. Analysts were expecting the company to report revenue of $526.5 million.
Advertising revenue rose 5% during the first quarter due to third-party network ads and international growth. However, display ads, which command high prices, fell 1% in the U.S. Subscription revenue, meanwhile, dropped 15% in the first quarter.
AOL’s net income for the quarter rose from $4.7 million, or $0.04 per share to $21 million, or $0.22 per share. Analysts were expecting the company to report earnings of $0.07 per share.
AOL, which faces a proxy battle with activist shareholder Starboard Value, said that it would boost its operating profit for 2012 and make the Patch.com business profitable by 2013.
Tim Armstrong, CEO of AOL, said that the upbeat earnings for the first quarter of 2012 are evidence that restructuring efforts are paying off and that the company is committed to boosting value for its shareholders. Armstrong, whose efforts to grow advertising revenue have been criticized by Starboard Value, said that AOL is a much stronger company today than a year ago.
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