America Online Profits Plunge

America Online Inc. on Monday reported sharply lower profits in the recent quarter, hurt by a change in how it accounts for marketing expenses and increased spending to expand its network capacity.

But the results handily beat analysts’ expectations, with revenues soaring 46 percent amid a surge in new members and ad revenues at the nation’s largest online service.

America Online said it earned $2.64 million, or 2 cents per share in its fiscal third-quarter ended March 31. That was down from profits of $15.1 million, or 14 cents per share in the year-ago quarter.

Revenues jumped to $456.2 million from $312.3 million.

The results easily beat the average expectations of 13 analysts surveyed by IBES International Inc., who predicted a loss of 6 cents per share.