AOL Results Top Expectations on Advertising Strength

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The FINANCIAL — AOL Inc. reported a slight dip in earnings during the first quarter of the year, though the company logged better- than-expected 7.2% revenue growth amid stronger advertising.

Shares gained 1.6% in premarket trading, according to Nasdaq.

AOL has invested heavily in advertising technology over the past several years, creating a bright spot for the company as it attempts to create a viable alternative in that sector to giants like Facebook Inc. In the fourth quarter of last year, AOL exhibited more revenue growth on third party websites that the company helps sell advertising on than it did for its owned-and-operated properties.

Chief Executive Tim Armstrong told The Wall Street Journal in February that AOL-owned sites including, the Huffington Post, TechCrunch and Engadget, are seeing ad growth at a much stronger rate than AOL’s legacy properties, such as

In the first quarter, global advertising revenue grew 12% to $483.5 million. The increase reflected 19% growth in third-party revenue, or revenue from non-AOL sites.

Meanwhile, revenue from AOL platforms grew 21% from the year-earlier period.

However, revenue from AOL’s own properties fell 4% to $130.5 million.

Subscription revenue fell 5.5% amid an 11% drop in subscribers.

Overall, the company said it earned $7 million, or 9 cents a share, down from $9.3 million, or 11 cents a share, a year ago.

Excluding special items, per-share earnings fell to 34 cents from 35 cents a year earlier.

Overall revenue grew to $625.1 million from $583.3 million a year earlier.

Analysts polled by Thomson Reuters had forecast per-share earnings of 32 cents and revenue of $594.6 million.

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The company recently announced the launch of “One by AOL,” an attempt to offer advertisers and agencies software and tools designed to manage the entirety of their online marketing efforts.


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