AOL Reports Small Profit in First Earnings After Spinoff
CEO Tim Armstrong acknowledged the company has much work to do as part of its turnaround effort. In results that beat Wall Street expectations, AOL said net income for the fourth quarter was $1.4 million, compared with a loss of $1.9 billion one year ago."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," Armstrong said in a statement.
The positive earnings numbers come after a difficult year of cost-cutting and streamlining. Last month, AOL laid off over 1000 workers after a voluntary buyout program late last year fell short. "2009 marked the closing of an important chapter in AOL's history and the opening of a new chapter that we are passionately pursuing," Armstrong said. "We have a clearly defined strategy, and we enter 2010 incredibly focused on day-to-day execution."
The company reported that revenue declined by 17% last quarter to $809.7 million as its dial-up Internet access business continued to shrink. But that beat Wall Street expectations of $763.5 million revenue, according to analysts polled by Thomson Reuters.
With most of the cost-cutting and streamlining behind it, AOL can focus on its mission of creating world-class content to drive a global Web advertising business. A key part of the company's strategy involves Seed, an online application that lets qualified users create content about popular subjects, which can then be published online.
AOL's shares were up 1% in early trading Wednesday morning.