AOL Q1 Profit Down

(RTTNews) - AOL Inc. (AOL) reported that its net income attributable to the company for the first-quarter declined to $7.0 million, from the prior year's $9.3 million, with earnings per share decreasing to $0.09 from $0.11 last year.

Earnings per share was negatively impacted by a $17 million restructuring charge primarily related to a reorganization in its salesforce in the first-quarter as well as $10 million of primarily non-cash interest and other expense related to AOL's outstanding convertible notes and losses from foreign currency transactions.

Adjusted earnings per share also decreased to $0.34 from $0.35 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.32 per share for the quarter. Analysts' estimates typically exclude special items.

But, total revenues for the quarter rose to $625.1 million from $583.3 million in the prior year. Wall Street expected revenues of $594.57 million for the quarter.

Revenue grew 7% driven by 12% growth in global advertising and other revenue. Year-over-year comparisons were negatively impacted by $2 million in revenue from Patch in the first-quarter 2014, prior to its contribution to a joint venture on January 29, 2014. Revenue grew 9% year-over-year on an FX neutral basis.

Cost of revenues increased $34 million year-over-year, driven by a $46 million increase in traffic acquisition costs (TAC) associated with the growth of profitable Search and Third Party Properties revenue. Excluding TAC, costs of revenues declined year-over-year.