AOL Third Quarter Earnings Sneak Peek

AOL, Inc. (NYSE:AOL) will unveil its latest earnings on Tuesday, November 6, 2012. AOL is a global web services company whose business consists of online content, products, and services that it offers to consumers, publishers, and advertisers.

AOL, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 17 cents per share, up from a loss of 7 cents in the year-earlier quarter. During the past three months, the average estimate has moved down from 18 cents. Between one and three months ago, the average estimate was unchanged. It has since dropped over the last month. Analysts are projecting profit to rise by 1682.5% versus last year to $11.23.

Past Earnings Performance: Last quarter, the company reported profit of 22 cents per share versus a mean estimate of net income of. The company has beaten estimates for the past three quarters.

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A Look Back: In the second quarter, the company swung to a profit of $970.8 million ($10.17 a share) from a loss of $11.8 million (11 cents) a year earlier, beating analyst estimates. Revenue fell 2% to $531.1 million from $542.2 million.

Stock Price Performance: Between October 3, 2012 and October 31, 2012, the stock price dropped $1.83 (-5.1%), from $36.17 to $34.34. It saw one of its worst periods between April 17, 2012 and April 25, 2012 when shares fell for seven straight days, dropping 4% (-$1.02) over that span. The stock price saw one of its best stretches over the last year between February 7, 2012 and February 16, 2012, when shares rose for eight straight days, increasing 5.6% (+$1) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.95 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 1.82 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased more than twofold to $1.84 billion while liabilities rose by 8.8% to $465.6 million.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 5.6% in the third quarter of the last fiscal year, 6% in fourth quarter of the last fiscal year and 4% in the first quarter and then fell again in the second quarter.

Analyst Ratings: With five analysts rating the stock as a buy, one rating it as a sell and four rating it as a hold, there are indications of a bullish outlook.

Wall St. Revenue Expectations: On average, analysts predict $521.6 million in revenue this quarter, a decline of 1.9% from the year-ago quarter. Analysts are forecasting total revenue of $2.15 billion for the year, a decline of 2.3% from last year’s revenue of $2.2 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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