Ad revenue grew 14 percent over the third quarter of 2012 and, as Reuters reports, “the digital media and entertainment company said on Tuesday it took a pre-tax restructuring charge of $19 million and an impairment charge of $25 million, both related to Patch, sending operating income down 61 percent to $16.7 million.”
“AOL’s Q3 results are another step forward in our long-term plan,” Tim Armstrong, AOL Chairman and CEO, said in a news release. “The Q3 results highlight the strength of AOL’s strategy and the consistent execution of our team in delivering great consumer experiences and successful customer results.”
And major job cuts.
Page eight of the company’s 16 page earnings presentation reads “AOL Has a Track Record of Expense Reduction: AOL continues to reduce expenses while growing revenue.” The chart shows expenses of $46 million in Q3 2012, down to $34 million in Q3 2013.
Armstrong “made a big bet on Patch, spending more than $150 million on the network of local news sites dotting communities throughout the United States,” Reuters reports. “But in recent quarters AOL has retreated, making deep cuts in the money-losing operation, and in August it cut the Patch staff by half, to about 500 employees”
AOL’s Brand Group, which includes The Huffington Post and TechCrunch, grew display ad revenue by 11 percent.
AOL CFO Karen Dykstra said in an earnings call Tuesday that the company expects Path to be profitable by year’s end, and they’re looking for partners for some Patch sites, Jeff Bercovici reports.
“Dykstra said AOL has heard from potential partners or buyers on the national, regional and local levels and has every intention of reaching terms with some of them soon. ‘We are committed to either a partnership of some kind of model or a transaction by the end of the year, bringing Patch to exit the year at profitability,’ she said.”