AOL’s (NYSE:AOL) first-quarter profits plunged 86% amid declining overall revenue, but the Internet company’s stock rallied Wednesday as its results beat estimates and its global display ad sales grew for the first time since 2007.
AOL, which acquired The Huffington Post for $315 million during the quarter, said it earned $4.7 million, or 4 cents a share, compared with a profit of $34.7 million, or 32 cents a share. Excluding one-time items, it earned 22 cents, topping estimates for 19 cents.
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Sales slumped 17% to $551.4 million, but that exceeded forecasts on Wall Street for $536 million.
AOL said its ad revenue declined 11% to $313.7 million, but display ad sales increased 4% -- the first rise since the fourth quarter of 2007. Domestic display ad revenue jumped 11%, or 6% excluding acquisitions.
“Today represents an important milestone in the turnaround of AOL,” CEO Tim Armstrong said in a statement. “I am proud of the work completed thus far and we remain focused on accelerating our momentum through continued execution of our strategy to become the premier digital content company.”
AOL said its subscription revenue tumbled 24% to $215.4 million amid a 22% drop in domestic AOL-brand access subscribers and a 2% fall in average revenue per subscriber.
Shares of AOL rallied around the earnings beat, jumping 5.29% to $21.48 Wednesday morning. The rally cuts AOL’s 2011 loss to 14%.