Wednesday, January 27, 1999 Published at 23:25 GMT
Business: The Company File
AOL riding high
AOL's service had more than 15m subscibers at the end of 1998
Wall Street's technology sector looks set to receive another boost after the world's biggest internet service provider reported better-than-expected quarterly results and a stock split
America Online (AOL) said its second quarter after-tax profits surged 340% to $88m.
The Internet services giant set new records for advertising, electronic commerce and total revenues, as well as net income and subscriber growth.
The company's earnings per share came in at 17 cents, beating most analysts' forecasts of 14 cents. AOL's earnings per share were just 4 cents in the same quarter a year earlier.
The company said net income for the quarter to 31 December totalled $121m, or 22 cents a share compared with $33m, or 6 cents a share in the same quarter a year earlier.
Total revenues, the bulk of which the company derives from monthly subscriber fees, rose to $960m, up 62% on the same quarter of last year. Advertising, commerce and other revenues reached $181m, 66% up on last year.
Subscribers to the flagship AOL service topped 15.1m by the end of 1998.
The company was also very bullish about the future, saying business fundamentals were "very robust" going into the seasonally strong half of the financial year.
The figures were released after close of trade on Wall Street, but shares in the company were already trading higher ahead of the announcement - up 5.5% or 8 3/8 at 162. Thursday should the shares improve further as they were trading at around $166 in after-hours dealings on Wednesday.
Yet another stock split
AOL also became the latest in a long line of US companies to announce a stock split.
The two for one split will come into effect on 22 February, the company said.
It joins other technology leaders like Microsoft, IBM and eBay which have split their stock this week.
AOL shares have nearly trebled in value since early October. With such incredible rises in share price, companies see a stock split as making their shares more marketable by increasing the number in issue and reducing the cost of buying individual shares.
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