AOL Posts Lower 3Q Net Income, But Revenue Grows

AOL Inc. posted a sharp profit decline in the third quarter Tuesday, due to restructuring charges and a write-down related to its Patch news service.

But revenue increased 6 percent thanks to strong advertising, and shares jumped almost 8 percent in early trading.

The company earned $2 million, or 2 cents per share, in the July-September period. That’s down 91 percent from $20.8 million, or 22 cents per share, in the same period a year earlier. The latest quarter’s results include restructuring charges of $19 million and impairment charges of $25 million related to Patch. Excluding one-time items, AOL would have earned 55 cents per share in the latest quarter, above analysts’ expectations.

Revenue rose 6 percent, to $561.3 million from $531.7 million.

Analysts, on average, were expecting earnings of 49 cents per share on revenue of $548.8 million, according to a poll by FactSet. Analysts typically exclude one-time items from their estimates.

AOL’s advertising revenue was $386 million, up 14 percent from $340 million. Subscription revenue from AOL’s aging dial-up service continued to decline, as expected. It fell 7 percent, to $161.6 million from $173.5 million.

Shares of AOL Inc., based in New York, rose $3.30 to $42.02. The stock has traded in the 52-week range of $29.16 – $43.93.