The stock is up pre-market as investors relish the encouraging news about AOL’s improving ad sales, and discount the earnings disappointment due to known factors. The company reported Q4 net income of $35.5M, basically flat with the previous year, on revenues of $679M, +13.3%. The revenue number was well ahead of the $655.8B that analysts expected. Earnings at 43 cents a share appeared to miss the Street’s target of 60 cents– although the company says it was a beat if you add back 21 cents for one-time costs. AOL took a $13.2M restructuring charge, mostly for layoffs at the Patch local news service which it recently off loaded. Traffic acquisition costs also rose with the inclusion of Adap.tv, which AOL bought in September. But overall ad sales improved 23% to $507M helped by a 63% gain, to $223.6M, in Third Party Network transactions. Global Display ads rose 7% to $181.7M but Global Search fell 2% to $101.7M. AOL remains weighed down by its declining Internet subscription business. Revenues there fell 10% to $156.7M as the number of domestic subscribers also fell 10% to 2.5M. all told, CEO Tim Armstrong says that 2013 was “AOL’s most successful year in the last decade” and it “plans to invest in our market leading strategies while we continue to grow the company.”
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This article was printed from http://www.deadline.com/2014/02/aol-revenues-beat-q4-estimates-but-profits-hit-by-rising-costs-and-charge-for-patch/