AOL Inc.’s profit grew in the third quarter thanks to gains on investments it sold during the quarter, but revenue declined sharply as online ad sales fell and its and its dial-up Internet access business continued to falter.
Nonetheless, the company’s results seemed to give investors some reassurance that AOL is on the right track in its plans to turn its business around. Shares rose $1.60, or 6.3 percent, to $26.89 in morning trading.
The troubled Internet company has struggled since before its split from Time Warner Inc. late last year. Led by CEO Tim Armstrong, a former Google executive, it is trying to revitalize itself to rely on online advertising as subscribers steadily abandon the Internet access business that made it famous in the 1990s.
AOL said Wednesday its net income rose to $171.6 million, or $1.60 per share, in the July-September quarter, up from $74 million, or 70 cents per share, a year earlier.
But much of the growth was from cost cuts and gains from the company’s sale of its investments in the travel Web site Kayak and the instant messaging business ICQ.
AOL had shown few signs of progress in the first half of the year, though Armstrong said in August that the company has “moved the needle from ‘survive’ to ‘thrive.'”
On Wednesday, Armstrong said the company “continued on the path towards better health” through acquisitions, dispositions, product improvements and site relaunches.
AOL’s revenue dropped 26 percent to $563.5 million from $763.9 million. The latest figure was slightly above Wall Street estimates of $557 million, according to a Thomson Reuters poll.
The company’s adjusted earnings from continuing operations were 93 cents per share. Analysts were expecting 48 cents, but a Thomson Reuters representative could not immediately say whether the two numbers were comparable.
Advertising revenue dropped 27 percent to $292.8 million — a change…