America Online Inc’s shares soared to a record high on Thursday after the Dulles, Virginia company reported a third-quarter profit of $18.6m, or $0.08 per share including charges – $0.04 ahead of Wall Street expectations. AOL shares climbed as high as $92.25, before closing at $89.6875, up $1.6875. A year ago the shares were trading at the $25 level. More importantly, the shares are now within striking distance of the $110 level of just three months ago when the company announced it was splitting its stock (CI No 3,345). The world’s largest online service on Wednesday posted its best quarter ever, adding 1.1 million new members to push its rolls above 12 million. Revenue from advertising, commerce and other non-subscription areas amounted to $117.9m, compared to $68.6m in the year-ago quarter. The backlog of advertising and commerce contract revenues increased $107m from the December quarter to $427m. Marketing expenses were cut during the quarter from $92.8m to $84.2m, or 12% of revenues. AOL also vastly improved its cash position by $405.9m during the quarter, bringing its total stockpile to $924.1m. The company has acknowledged in the past that it needed to do some work on its balance sheet and that work has paid off to some extent. Current assets now outweigh current liabilities – $1.17bn to $856.5m – a complete reversal of recent trends for AOL.
