AOL Earnings Preview

Motley Fool Staff
Updated

AOL (NYS: AOL) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Tuesday. AOL is a global Web services company whose business consists of online content, products, and services that it offers to consumers, publishers, and advertisers.

What analysts say

What our community says
Most CAPS All-Stars are skeptical of AOL's prospects, with 64.4% assigning it an underperform rating. Like the All-Stars, the community is also not a fan of AOL with 68.2% awarding it underperform rating. Fools are skeptical of AOL and haven't been shy with their opinions lately, logging 107 posts in the past 30 days. AOL's bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management
Revenue has fallen for the past three quarters. The company's gross margin shrank by 15.6 percentage points in the last quarter. Revenue fell 17% while cost of sales rose 6.6% to $388.9 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

29.5%

37.8%

39.1%

42.9%

Operating Margin

(2.1%)

32.1%

14.4%

(228.8%)

Net Margin

0.9%

10.8%

30.5%

(180.6%)

For all our AOL-specific analysis, including earnings and beyond, add AOL to My Watchlist.

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At the time thisarticle was published

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