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AOL Q1 results surpass estimates on strong advertising sales

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AOL (NYSE:AOL) jumped in morning trades after the owner of the Huffington Post news website and the TechCrunch blog reported better-than-expected adjusted earnings and revenue in the first quarter, helped by strong advertising business.

Shares rose 10.4 percent to $43.50 at 10:18 a.m. in New York, paring this year’s loss to 5.8 percent.

Net income fell to $7 million, or $0.09 per share, in the January-to-March quarter, from $9.3 million, or $0.11 per share, a year earlier, the New York-based company said in a statement today.

Excluding items, earnings were $0.34 per share, beating the $0.32 average estimate of 16 analysts polled by Capital IQ.

Revenue rose 7.2 percent to $625.1 million, topping the average analyst estimate of $594.6 million.

Sales at AOL’s platforms unit, which includes digital advertising, grew 21 percent to $279.8 million.

Advertising has become a major revenue stream for AOL as the company moves away from dial-up subscription service.

Almost half of online display ads on AOL’s websites are now sold through automation. Last month the company unveiled technology that helps marketers decide where to best spend their money, putting it in direct competition with two leading Web ad companies, Google and Facebook.

AOL grew its consumer base strongly and saw continued strength in video, mobile and programmatic advertising, while we also updated the structure and capabilities of the company,” chief executive officer Tim Armstrong said in a company statement.

However, revenue from AOL’s own properties fell 4 percent to $130.5 million. Subscription revenue fell 5.5 percent amid an 11 percent drop in subscribers.

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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