AOL Stock Jumps Despite Profit Decline

AOL Inc. (NYSE:AOL) saw its stock increase despite an earnings report that, at best, could be defined as “not as bad as expected.”  Besting Wall Street expectations, the company was a revenue decline of 3 percent to $576.8 million and quarterly earnings of $22.8 million, which are down 66% from a year ago.  Total revenue for 2011 declined to $2.2 billion, or 9%.  Nevertheless, the results bested Wall Street expectations, and thus saw the increase in price; this morning, the stock was trading at $17.95, a better than 10% increase

On the plus side, the year had a profit of $13.1 million after a loss of $782.5 million in 2010.  The company also saw increased revenue from advertising of about 10 percent, its third quarter in a row of revenue growth.  The 3 percent revenue decline was also the company’s lowest in five years.  The year also saw the company’s very well-publicized purchase of The Huffington Post.

In a conference call, CEO Tim Armstrong stated that the company might “potentially grow revenue in 2012 for the first time in a very long time.”  Citing as his reason for optimism was the increase in advertising revenue and a new focus on building brands of internet content.  Of key interest to Armstrong was developing video content, citing the success existing premium video programs starring Heidi Klum and Mark Burnett.  Armstrong indicated that the company may attempt pursue similar video content in the future.

Here’s how AOL shares closed today:

AOL, Inc. (NYSE:AOL): AOL shares recently traded at $17.76, up $1.55, or 9.56%. They have traded in a 52-week range of $10.06 to $24.22. Volume today was 6,921,920 shares versus a 3-month average volume of 1,433,350 shares. The company’s trailing P/E is 33.70, while trailing earnings are $0.53 per share.

To contact the reporter on this story: Jonathan Morris at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com