AOL, Compaq Profits Beat Analysts’ Expectations

America Online Inc. said Wednesday that its profit more than quadrupled in its fiscal second quarter, beating analysts’ expectations, as the No. 1 online service boosted membership and advertising.

AOL, which reported its results after the close of U.S. trading, also said it will split its stock 2-for-1 on Feb. 22, its second stock split in three months.

Compaq Computer Corp., the world’s No. 2 computer maker, also beat analysts’ forecasts with a 2.2% increase in fourth-quarter earnings. Sales rose less than expected, though, by 2% to $10.86 billion.

Dulles, Va.-based AOL said its profit, excluding a tax credit, soared to $88 million, or 17 cents a share, from $19.6 million, or 4 cents, a year ago, as revenue climbed 62% to $960 million. The performance beat analyst estimates by 3 cents.

AOL boosted membership by 12% to 15.1 million during the quarter as an ad campaign for its new software attracted 1.6 million customers. During the holiday season, about 1.25 million subscribers bought goods online for the first time, which helped the company increase advertising rates for retailers who want to sell goods to AOL members.

Revenue from subscriptions jumped 61%, and revenue from advertising, electronic commerce and other sources surged 66%.

Houston-based Compaq said its net income increased to $758 million, or 43 cents a share, from year-earlier pro forma results that included Digital Equipment Corp., which it acquired in June. Analysts were expecting 37 cents.

The computer maker is slashing 20% of its work force as it combines with Digital. Earnings also were helped by a lower tax rate and sales of Digital computers.

Shares of AOL rose $10.50 to close at $165.50, and Compaq shares fell $1.75 to close at $47.50. Both trade on the New York Stock Exchange.