Investors unimpressed as company reduces losses, increases global advertising for first time since 2008 (Updated)
AOL dramatically reduced its second-quarter losses as it increased its global advertising for the first time since 2008, but the stock plummeted Tuesday even as U.S. markets rose.
Shares of the stock closed down 25.75 percent, at $11.19. It was the all-time low price since the company split from Time Warner in 2009. (Shares climbed back to $12 in after-hours trading.)
Overall ad revenue was up 5 percent, climbing to $319 million from $304.7 million in the same quarter last year. But chairman and CEO Tim Armstrong said the company should have had better sales of display ads. "We had the ability to capture more than we did," he said in a call with analysts.
The company posted losses for the quarter of $11.8 million, down from $1.055 billion in the same quarter last year, when it was hit with a $1.4 billion writedown.
Revenue slipped 8 percent, to $542.2 million. Analysts polled by Thomson Reuters had expected $530 million in revenue and per-share earnings of 4 cents.
The quarter was the first full one for the company since its acquisition earlier this year of the Huffington Post. Since taking over as president and editor-in-chief of the AOL Huffington Post Media Group, Arianna Huffington has gone on a hiring spree in an attempt to increase traffic and ad revenue.