HuffPo Parent Company AOL's Profits Fall, Shares Tumble 22%

AOL, the company that owns Internet sites Huffington Post and Tech Crunch, has seen stock prices tumble 22 percent due to an unexpected decline in its quarterly profit.

On May 7, AOL announced it had missed its estimated profits with its net income dropping a whopping 64 percent to $9.3 million.

The company claimed the loss was incurred due to costs related to workforce reduction and a $10 million charge for new software at its legacy dial-up subscription Internet service.

AOL executives also blamed "seasonality" for the losses.

Still, the company did see some areas of rising profit. Sales through AOL's automated electronic exchange rose 43 percent to $230.8 million after the acquisition of video advertising platform Adap.TV.

AOL is also still looking to acquire new companies as well. This week it announced that it would pay $101 million to acquire Convertro Inc, a company that helps advertisers manage their ads across different media platforms.

The company is still attempting to position itself for the future of advertising online and over mobile devices.

"Our view is that 2014 is going to be a good year for AOL," Laura Martin, an analyst with Needham and Co., said.

But Nomura analyst Anthony DiClemente is still skeptical about AOL, at least in the near future. DiClemente notes that AOL's mobile traffic and display pricing were improving, but also said that there is no clear sign of stable growth. He also said that AOL needed to generate more profits from its media properties.

AOL stock closed down $9.05 at $34.85.

Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com


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