Newly independent AOL posts 4Q profit
AOL, free from Time Warner, posts 4Q profit despite slide in subscriber, advertising revenue
AOL Inc., newly released from its fizzled marriage with Time Warner Inc., reported a profit for the fourth quarter on Wednesday, reversing a year-ago loss brought on by huge accounting charges even as revenue fell.
AOL, which runs dozens of Web sites and a shrinking dial-up Internet access business, officially split off from media conglomerate Time Warner Inc. on Dec. 10.
That ended a disastrous corporate union that began when AOL — then known as America Online — acquired the media conglomerate at the height of the dot-com boom in 2001.
AOL rose to fame in the 1990s with its legacy dial-up Internet access business, but began to decline after hitting a subscriber high in 2002 as faster broadband Internet connections gained popularity.
For the past several years, the company has been trying to reinvent itself as a content and advertising business. This has not been easy, as advertising revenue hasn’t been able to offset the drop in dial-up revenue.
AOL now operates a variety of Web sites, include the popular tech blog Engadget, personal finance site WalletPop and food site Slashfood.
The company said Wednesday it earned $1.4 million, or a penny per share, in the last three months of 2009. That contrasts with a loss of almost $2 billion, or $18.52 per share, a year earlier, which included $2.2 billion worth of one-time charges.
Stripping out restructuring and other unusual expenses from the most recent quarter, AOL earned 71 cents per share. On average, analysts expected 63 cents per share, according to Thomson Reuters.
Revenue fell 17 percent to $809.7 million, reflecting smaller contributions from its two main sources, dial-up subscribers and online advertising.
Still, it was better than the average forecast of $763.5 million.
Its shares rose 3 percent to $25.44 in premarket trading.