(Correction: The original article incorrectly indicated that the company missed earnings estimates. A corrected version follows.)
AOL, Inc. (AOL) reported Wednesday a profit for the second quarter that edged down from last year, despite revenue growth, hurt by higher amortization of intangible assets. However, the company reported adjusted earnings that came in above analyst estimates.
Global advertising revenue grew 20 percent, while subscription revenues declined 7 percent.
"AOL's future as a scaled media technology company continues to get stronger. AOL grew consumer usage, video, programmatic advertising, branded content, and ad pricing throughout the first half of 2014, and we will continue to make AOL one of the best operating companies in our industry," Chairman and CEO Tim Armstrong said in a statement.
New York-based AOL, spun off from Time Warner, Inc. (TWX) in December 2009, reported net income of $28.2 million or $0.34 per share for the second quarter, edging down from $28.5 million or $0.35 per share in the prior-year quarter.
Meanwhile, the company reported adjusted earnings, which exclude certain items, of $0.45 per share. On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total revenue for the quarter increased 12 percent to $606.8 million from $541.3 million in the same quarter last year, helped by accelerated global advertising revenue growth, and topped seventeen Wall Street analysts' consensus estimate of $595.51 million.
Among AOL's reportable segments, brand group revenue decreased 2 percent to $186 million, and membership group revenues declined 5 percent to $204 million from last year. AOL platforms revenue surged 54 percent to $247 million from a year ago.
Global advertising and other revenues for the quarter rose 20 percent to $452 million, with AOL properties search revenues rising 6 percent, and third-party network platform revenue surging 60 percent, while AOL properties display revenues decreased 1 percent from last year. Third Party platform revenue grew only about 20 percent excluding Adap.tv, which was acquired last year.
The company noted that growth in advertising pricing, video and programmatic drove the 20 percent growth in AOL's global advertising revenues.
Domestic average monthly multi-platform unique visitors to AOL properties improved 18 percent to $171 million, while domestic average monthly desktop unique visitors to AOL properties declined 7 percent to $108 million from a year ago.
Meanwhile, subscription revenues for the quarter declined 7 percent to $155 million, with a 1.6 percent domestic AOL-brand access subscriber monthly average churn, compared to 1.4 percent last year.
Domestic AOL-brand access subscribers declined 9 percent to 2.34 million, while average monthly subscription revenue per AOL subscriber or ARPU advanced 4 percent to $20.86 from last year, primarily reflecting a price increase.
Amortization of intangible assets totaled $16.5 million, compared to $9.1 million last year.
AOL closed Tuesday's regular trading session at $39.00, unchanged on a volume of 1.49 million shares.
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