AOL Posts Small Q4 Profit
AOL’s fourth quarter profit and revenue beat Wall Street’s forecast, but the company said its revenue from subscriptions and online search advertising would decline in the coming months.
AOL was spun off by Time Warner in December and is trying to reposition itself as an online content and advertising company under chief executive Tim Armstrong, formerly a Google executive.
AOL had a fourth quarter net profit of $1.4 million compared with a net loss of $1.96 billion in the same quarter a year ago.
AOL advertising revenue feel by eight percent in the fourth quarter to $ 471.6 million while subscription revenue declined by 28 percent to $307.4 million. Total revenue was down 17 percent to $809.7 million.
“We have made significant progress in support of the long-term vision we see in the future of AOL, but today’s results continue to reflect the need for our focus and execution on the work required in the turnaround of the Company,” said Tim Armstrong, Chairman and Chief Executive Officer.
“2009 marked the closing of an important chapter in AOL’s history and the opening of a new chapter that we are passionately pursuing. We have a clearly defined strategy, and we enter 2010 incredibly focused on day-to-day execution.”
Other highlights from the earning report include:
Q4 revenue declines reflect continued attrition in the subscriber base, leading to declines in subscription and search & contextual revenue. While AOL Properties global display advertising revenue declined 3%, AOL Properties domestic display advertising revenue grew 1%, its first quarter of year-over-year growth in eight quarters.
We anticipate our restructuring efforts will reduce ongoing operating expenses, excluding TAC and net of incremental operating investments in the business, by approximately $150 million in 2010.
Full-year and Q4 2008 operating loss and net loss reflect a $2.2 billion non-cash goodwill impairment charge.
Full-year cash provided by operations declined, driven by Adjusted OIBDA declines. The cash flow impact of these declines was partially offset by the timing of working capital changes, including lower employee bonus payments in 2009. Full-year 2009 Free
Cash Flow grew slightly, reflecting reduced capital expenditures in 2009. Q4 2009 cash provided by operations and Free Cash Flow declined due to the settlement of a legal matter and a Value Added Tax matter in France.
AOL had $147.0 million of cash-on-hand as of December 31, 2009, and has not borrowed under the terms of our revolving credit facility, as of February 2, 2010.
