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AOL posts higher Q3 revenue

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Strong ad sales drove revenue higher for AOL Inc. (NYSE:AOL) in the third quarter, offsetting declines in subscription revenue.

AOL's total revenue grew 6% to US$561.3 million in the three-month period ending Sept. 30, higher than the consensus estimate of US$548.8 million. AOL's largest source of revenue, ad sales, jumped 14% to US$386 million.

The company's brand unit posted a 9% gain in revenue on gains in revenue per search, while revenue for AOL Networks increased 19%. The gains offset a 7% decline in Membership Group sales, as subscription sales dropped 7% to US$161.6 million.

Despite the higher revenue, AOL's profit sank 90% to US$2.0 million or two cents a share from US$20.8 million or 22 cents a share a year ago as expenses, in particular traffic acquisition costs, rose US$36.3 million over the same period a year ago.

During the quarter, AOL said it had purchased 2.5 million shares at an average price of $34.25. The company said it has approximately US$115 million remaining in its current share repurchase plan.

The stock has risen about 30% so far this year.

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