AOL just reported its Q3 earnings.
It beat expectations.
Profits are down sharply year-over-year, but that’s because AOL finally cut costs in its local news division, Patch, and had to deal with restructuring costs and asset impairments.
Investors have long yearned for AOL to cut Patch costs, so they likely won’t mind the short term pain.
Adjusting for those costs, profits are up.
Here’s a quick run down from the company:
- Total Revenue was $US561.3M versus ~$549 million estimates.
- Adjusted OIBDA of $US119.8 versus ~$115 million estimates.
- Profits were down 90% year-over-year, but this is due to “pre-tax restructuring costs of $US19.0 million as well as $US25.0 million related to non-cash intangible asset impairments in our Patch operations.”
- Excluding the items impacting comparability detailed on page 9 of the release gets you to an Adjusted EPS of $US0.55, which is $US0.04 ahead of the consensus estimate of $US0.51.
AOL says it repurchased 2.5 million shares from July 1 through today at an average of $US34.25.
AOL highlighted these trends in a release emailed to us:
- Grew all advertising revenue lines year-over-year for the 3rd consecutive quarter
- Grew global advertising revenue year-over-year for the 10th consecutive quarter
- Grew search revenue year-over-year for the 5th consecutive quarter
- Grew Third Party Network revenue 32% year-over-year for the 10th consecutive quarter
- Grew Third Party Network revenue 17% year-over-year, excluding Adap.tv
- Grew Brand Group display revenue double-digits (11%)
- Brand Group returns to positive Adjusted OIBDA
- Traffic on AOL properties accelerated to 4% year-over-year growth, our 5th consecutive quarter of growth