AOL Shares Rise as Company Says Ad Business to See Profits

Aug. 6 (Bloomberg) -- AOL Chairman and CEO Tim Armstrong discusses the company’s video content plans and Twenty-First Century Fox’s retraction of its bid for Time Warner. He speaks on “In The Loop.” (Source: Bloomberg)

AOL Inc. (AOL) shares rose the most in almost seven months after forecasting a profit for its advertising-platform business in the second half of this year.

The online advertising and publishing company, famous for pioneering e-mail services with its “You’ve got mail!” greeting, gained as much as 9.6 percent, the biggest intraday increase since Jan. 16. The platform unit’s second-quarter loss narrowed to $5 million from $11.3 million a year earlier, with revenue climbing 54 percent to $247.1 million.

“We’ll be profitable in the second half of this year, starting with Q3,” Chief Financial Officer Karen Dykstra said in an interview, referring to the company’s advertising-platform business. “We’re confident we will return to profitability in 2014.”

AOL, based in New York, is counting on the platform business, which lets advertisers buy space on websites and online videos, for growth as its traditional subscription business declines. Revenue in the membership division, which includes subscriptions, fell 4.7 percent to $203.8 million in the second quarter.

Net income fell to $28.2 million, or 34 cents a share, from $28.5 million, or 35 cents, a year earlier, the company reported. Revenue jumped 12 percent to $606.8 million, topping the $594.6 million average estimate of analysts compiled by Bloomberg.

AOL shares rose 7.5 percent to $41.92 at the close in New York.

To contact the reporter on this story: Caitlin McCabe in New York at cmccabe11@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net Crayton Harrison, Niamh Ring

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