Bloomberg News

AOL Rises as Ads, Patent Sale Fuel Second-Quarter Profit

July 25, 2012

AOL Inc. (AOL:US), owner of the Huffington Post and TechCrunch, rose the most since May after an increase in advertising sales and a one-time gain on a patent sale helped the company return to a profit in the second quarter.

AOL advanced 5.4 percent to $28.97 at 10:02 a.m. in New York, after earlier gaining 5.7 percent for the biggest intraday jump since May 9. The stock had advanced 82 percent this year through yesterday.

Net income was $970.8 million, or $10.17 a share, compared with a loss of $11.8 million, or 11 cents a share, a year earlier, the New York-based company said today in a statement. Excluding some items, per-share profit was 23 cents, in line with analysts’ average estimate (AOL:US) in a Bloomberg survey.

Since the Web portal was spun out of Time Warner Inc. (TWX:US) in 2009, Chief Executive Officer Tim Armstrong has been trying to transform AOL into an ad-based publishing business. The company bought the Huffington Post for $315 million last year and invested as much as $300 million in Patch, a local-news division that Armstrong sees commanding up to $50 million in sales this year.

The company booked a $945.8 million gain in the second quarter on the sale of patents. Sales dropped 2 percent to $531.1 million. Analysts had estimated $519.2 million, according to Bloomberg data.

Global display advertising rose 1.7 percent to $139.9 million, while the U.S. portion was little changed. Total advertising improved 5.9 percent to $337.8 million.

AOL’s U.S. advertising revenue ranks fifth among major competitors behind Google Inc. (GOOG:US), Yahoo Inc., Facebook Inc. (FB:US) and Microsoft Corp., according to research firm EMarketer Inc.

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • AOL
    (AOL Inc)
    • $42.26 USD
    • -0.17
    • -0.4%
  • TWX
    (Time Warner Inc)
    • $76.86 USD
    • 0.10
    • 0.13%
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