AOL posts steep drop in 1Q profit, hurt by charges

NEW YORK (AP) -- AOL Inc. said Wednesday that its first-quarter profit tumbled 64 percent, pulled down by restructuring and other charges.

Its adjusted earnings disappointed investors and AOL shares dropped sharply in morning trading.

The New York-based Internet company earned $9.3 million, or 11 cents per share, for the January-March period, down from $25.9 million, or 32 cents per share, a year ago.

The recent quarter's results included a restructuring charge of $12 million and an asset impairment charge of $10 million that stemmed from the write-off of capitalized software development costs. It said those and other one-time items cut earnings by 23 cents per share.

But the resulting adjusted earnings of 34 cents per share still fell short of the 45 cents that analysts surveyed by FactSet had expected.

Revenue increased 8 percent to $583.3 million from $538.3 million. Analysts, on average, expected $577.7 million in revenue.

The company's revenue got a boost from a 16 percent increase in global advertising revenue to $433.4 million, while subscription revenue dropped 10 percent to $149.9 million. The company has shifted its focus toward advertising in recent years, as subscription revenue from its aging dial-up service continues to decline.

AOL shares fell $3.24, or 18.8 percent, to $35.66 in morning trading. Its shares had been down 5.8 percent so far this year through Tuesday's close.