AOL, Inc. (AOL) Stock Nose Dives On Earnings Miss

AOLImage source: Made with Photoshop

The stock price of AOL, Inc. (NYSE:AOL) suffered a steep decline today after the company reported first quarter earnings that missed consensus estimates of Wall Street analysts. The shares of the company were down more than 22% to $34.19 per share as of 11:44 AM in New York.

Financial results

AOL, Inc. (NYSE:AOL) said its net income declined 64% from $25.9 million to $9.3 million. Its earnings per share dropped 66% to $0.11 per share from $0.32 per share in the year ago quarter.

The company’ adjusted earnings per share of $0.34 fell short of the $0.45 earnings per share expected by analysts polled by FactSet.

According to the company, its earnings for the quarter were negatively affected by a pre-tax restructuring charge of $12 million and an asset impairment charge of $10 million from the write-off of capitalized software development costs. AOL, Inc. (NYSE:AOL) explained those charges reduced its earnings by $0.23 per share.

AOL, Inc. (NYSE:AOL) posted $583.3 million in revenue, an increase of 8% from $538.3 million in the same period a year ago. According to the company, its global advertising revenue rose 16% to $433.4 million, but its subscription revenue declined 10% to $149.9 million.

The company ended the quarter with $124 million cash and equivalents as well as $30 million outstanding debt under its $250 million senior secured revolving credit facility agreement.


AOL, Inc. (NYSE:AOL) recently acquired Convertro, a multi-touch attribution modeling technology provider for brands and agencies. The company paid approximately $101 million in cash and stock for the acquisition.

The acquisition price included $89 million cash, $2 million in converted securities, and a $10 million earn-out, payable over a period of 17 months subject to the accomplishment of certain product development milestones.

According to AOL, Inc. (NYSE:AOL), combining its platforms with Convertro’s platform allows marketers to identify and accurately value every consumer touch point through the purchase of funnel from the first exposure to conversion.

In a statement, AOL Chairman and CEO Tim Armstrong, chairman said, “AOL’s investment in global media and technology platforms is allowing AOL to compete on a global scale.”

AOL stock at risk

Over the past 52-weeks, the shares of AOL, Inc. (NYSE:AOL) traded as high as $53.22 per share and as low as $32.19 per share. According to SmartStops, the stock is currently at an elevated risk given its huge decline today due to disappointing earnings results.

About the Author

Marie Cabural
Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.