AOL Stock Heads Lower After Earnings Miss

Q1 profits fall 64%

   

AOL Stock Heads Lower After Earnings Miss

AOL stock (AOL) is down 13% this morning after its Q1 results missed analyst expectations because of restructuring charges and write-downs at the company.

Its profit fell to $9.3 million (11 cents a share), down from $25.9 million (32 cents a share) this quarter last year.

In a statement, AOL noted that its earnings were down in part due to some $22 million in restructuring charges, along with write-downs.

Analysts expected earnings of 45 cents a share with revenue at $578 million.

In all, its first quarter profit fell 64%.

AOL’s move to keep consumers — and increase its visibility — is being driven with original content on its networks.

Via Reuters:

AOL and a handful of its competitors have started building up original content for their video networks, in an effort to pull in more viewers and grab a larger slice of the ad dollars that currently flow to cable channels. But unlike Yahoo Inc. or Microsoft Corp., which are focusing on TV-like scripted content, AOL’s current strategy has been to work on unscripted, celebrity-driven reality programming and documentaries.

Then there’s the ad side of things.

AOL noted on Tuesday that it bought Convertro for $101 million as mines consumer data via online marketers.

Its push comes as AOL sees ad revenue increasing.

AOL’s advertising revenue jumped 16% to $433.4 million. Third-party network revenue grew 55%, driven by the inclusion of Adap.tv, an ad platform it recently acquired. Excluding that acquisition, third-party revenue rose 18%.

AOL stock is down 16% year to date.

More AOL News


Article printed from InvestorPlace Media, http://investorplace.com/2014/05/aol-stock-down-earnings-miss/.

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