AOL Reports Another Strong Quarter, Makes Marissa Mayer And Yahoo Look Even Worse

Tim ArmstrongREUTERS/Jim UrquhartCEO of AOL Tim Armstrong attends the Allen & Co Media Conference in Sun Valley, Idaho July 12, 2012.

AOL delivered a solid earnings report this morning.

It beat expectations on revenue, but had a slight miss on EPS, which was down 3% compared to a year ago. It attributed the profit miss to increases in stock-based compensation, and amortization of intangible assets.

Investors are shrugging at the EPS drop. The stock has fluctuated, going up 3-5% pre-market.

Digging into the numbers a bit you can see why investors are pleased.

Total revenue was up 12% to $US606.8 million. Display ad revenue was down 1%, but that’s due in part to the fact that AOL no longer owns Patch, the local news business. If you ex-out Patch, AOL says display ad revenue was up 9%.

Considering that AOL was a company on the verge of implosion only a few years ago, this is a really good report. The company is moving in the right direction.

It’s especially great in comparison to Yahoo, which does the same stuff as AOL, just a larger scale. Yahoo’s revenue over the same period was down 3%, and its display ad business was down 7%. In defence of Marissa Mayer, Yahoo’s CEO, it did take Armstrong a few years to get things corrected at AOL.

Here is a table that shows all of AOL’s results. One thing to note: It’s getting more money from internet subscribers than from display revenue on its own sites.

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