Web 1.0 giant AOL Inc. (AOL) reported third quarter earnings before the bell on Nov. 5, and the numbers were surprising in two key areas. The company missed profit expectations by a significant margin. However, this earnings miss coincided with a surprising revenue beat, that showed a 6 percent increase from the previous year.
Though far removed from its heyday as the pre-Google Inc. (GOOG) king of the internet, AOL has showed surprising resilience, and has begun adapting to the sea change in tech that has taken place over the last ten years. This was apparent in AOL’s earnings report that showed significant growth in video advertising, specifically from revenue driver Third Party Network, which showed a 32 percent pop year-over-year.
Alongside the revenue beat, investors got some good news in the form of a share buyback. In the earnings report AOL announced they had repurchased 2.5 million shares at $34.25 a share.
AOL’s net profits were greatly hurt by a $40 million charge associated with its local news division Patch and $19 million in restructuring costs. The renewed focus on video, though, is expected to eventually offset the Patch snafu and internal shakeups. Excluding those writedowns, AOL actually beat earnings estimates by three cents a share.
For their third quarter 2013 earnings report, AOL reported a net gain of $2 million, or $0.02 per share, versus the net gain of $20.8 million, or $0.22 per share, from the same period a year ago. Revenue for the quarter was $561.3 million, as compared to $531.7 million from the previous year. Analysts were expecting a net gain of $0.35 per share on revenues of $548.8 million.
AOL jumped on the news, rising 8.57 percent in midday trading to hit $42.04 a share.
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