NEW YORK (CNNfn) - America Online Inc. Tuesday reported better-than-expected fiscal second-quarter profits and announced a two-for-one stock split.
The Dulles, Va.-based online giant earned $20.76 million, or 17 cents a diluted share in the three months ended in December, beating Wall Street expectations by a penny a share.
The results represent a dramatic turnaround from the year-ago quarter when AOL reported a loss of $129.1 million, or $1.37 a diluted share.
AOL (AOL) shares closed off 1-7/16 to 109. However, the stock rebounded to 111-3/4 in after hours trade.
The company said revenues increased 45 percent to a record $592 million compared to $409.4 million a year ago.
The move comes one day after AOL, the world's largest online service, announced plans to raise monthly unlimited access fees by 10 percent to $21.95 as part of a broad restructuring.
For the six-month period, AOL's net income was $39.9 million, or 33 cents a diluted share, compared to a loss of $482.7 million, or $5.15 a diluted share in 1997.
Revenues from advertising and online commerce initiatives came in at $108.8 million compared to $58.2 million last year.
AOL Chairman Steve Case said the results prove the company's efforts to increase capacity and improve the usability of its software are paying off.
"AOL added almost 1.3 million new members this quarter and members increased their usage, demonstrating that we're becoming more and more a part of people's everyday lives," he said.
Case said AOL has invested more than $700 million in network improvements, expanding customer service and developing the next version of its software.
He also said AOL has improved its reliability and capacity to handle the growing membership which now numbers more than 11 million.
In other news Tuesday, AOL said its board of directors had approved a two-for-one stock split that will take effect March 16. It will include everyone who buys or holds shares by Feb. 23.
Directors last week also voted to double the number of common shares from 300 million to 600 million.
America Online said average daily of usage per member reached 41 minutes per member, up from 21 minutes in the same quarter a year ago. It said its members now essentially pay 80 cents per hour for usage under flat-rate, unlimited use pricing compared with the $2.40 per hour they paid before flat-rate pricing was introduced in December 1996.