AOL Inc. (NYSE: AOL) released first-quarter 2015 results before markets opened on Friday, and the Internet media company posted adjusted diluted earnings per share (EPS) of $0.34 on revenues of $625.1 million. In the same period a year ago, the company reported EPS of $0.35 on revenues of $583.3 million. First-quarter results also compare to the Thomson Reuters consensus estimates for an EPS of $0.32 and $594.57 million in revenues.
The 7% revenue boost was attributed to 12% growth in global advertising and other revenues. The company’s former Patch business added $2 million in first quarter 2014 revenues. On a currency-neutral basis, the company’s revenues rose 9%.
Costs of revenues rose by 7%, $34.1 million year-over-year, to $491.6 million. AOL attributed the rise to a jump of $46 million in traffic acquisition costs.
The company’s CEO said:
AOL grew its consumer base strongly and saw continued strength in video, mobile and programmatic advertising, while we also updated the structure and capabilities of the company. AOL continues to grow in strength and we are on a mission to scale the first Media Technology company of the internet and mobile age.
The company’s subscriber numbers dropped 11% year-over-year to about 2.2 million and domestic average monthly AOL multi-platform unique visitors rose 12% to 190,000, while the number of visitors to AOL properties dipped 6%.
We’ll have to wait for the conference call for any guidance, but the consensus estimate for the current quarter calls for EPS of $0.43 on revenues of $619.43 million. For the full year, the estimate for EPS is $2.11 on revenues of $2.63 billion.
Three months ago the consensus estimate for first-quarter EPS was $0.47. The revenue miss in the fourth quarter lowered expectations for both revenues and earnings. Analysts’ first-quarter expectations appear to have been too pessimistic.
AOL’s shares rose about 8.9% to $42.88 early Friday. The stock’s 52-week range is $33.20 to $49.86. The consensus price target for the shares was $45.65 before the report, and the high target was $67.00.