AOL revenue beats estimates on strong ad sales

Reuters News
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Posted: May 08, 2015 7:12 AM

(Reuters) - AOL Inc reported quarterly revenue above analysts' expectations, boosted by demand for its real-time bidding platform that helps advertisers place video and display ads on other digital properties.

Shares of the company, whose businesses include the Huffington Post news website and the TechCrunch blog, were up 4 percent in premarket trading on Friday.

Advertising has become a major revenue stream for AOL as the company moves away from dial-up subscription service, helped by acquisition of automated advertising platforms such as Adap.tv.

Revenue in AOL's ad platform business rose 21 percent to $279.8 million, accounting for 45 percent of total revenue.

Ad sales across AOL's brands grew 8 percent as a surge in search ads more than offset continued weakness in display ads.

Total revenue rose 7.2 percent to $625.1 million, topping the average analyst estimate of $594.6 million.

Subscription revenue fell 6 percent to $141.6 million as the number of domestic subscribers fell 11 percent.

Net income attributable to AOL fell to $7 million, or 9 cents per share, in the first quarter ended March 31 from $9.3 million, or 11 cents per share, a year earlier.

Excluding items, the company earned 34 cents per share.

Analysts on average had expected a profit of 32 cents per share, according to Thomson Reuters I/B/E/S.

(Reporting by Abhirup Roy and Subrat Patnaik in Bengaluru; Editing by Joyjeet Das and Saumyadeb Chakrabarty)