Stock price jumps over 4 percent on the stronger than anticipated earnings
Advertising gains helped AOL's profits skyrocket, even as the internet pioneer continues to shed subscribers and see its overall revenue shrink, according to first quarter earnings announced Wednesday.
The company's stock price jumped over 4 percent to $26.64 on the stronger than anticipated report.
Net income at the company rose to $21.1 million in the quarter compared, or 22 cents a share. That was roughly four times the $4.7 million, or 4 cents a share, that AOL reported a year earlier. It also trounced analysts' projections of earnings of 7 cents a share.
The increase was partly attributable to a 5 percent rise in total advertising revenue, which increased to $330 million during the three-month period.
It's a piece of good news for the often besieged company. AOL has undergone a very public, intermittently messy, transition from being a dial-up internet service provider to a portal and hub for original content. As part of that effort, the company purchased the Huffington Post in 2011 for $315 million and poured resources into the local news site Patch.
"In 2012 and beyond, we are simultaneously focused on the continued successful execution of our strategy and on creating and unlocking value for our shareholders," AOL Chairman and CEO Tim Armstrong said in a statement.
Though AOL's profit margins were more larger, the company's revenue declined 4 percent to $529.4 million. That did, however, trump Wall Street's expectations. Analysts had projected revenue of $526.5 million, according to Reuters.
Subscription revenue also fell, slipping 15 percent to $182.1 million in the quarter as the company continues to dial down its internet provider arm.
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