Stronger ad sales lifted AOL's earnings, as the internet company saw its net income rise 23 percent during the first three months of the year.
Profits at the web company climbed to $25.9 million, or 32 cents a share, up from $21.1 million, or 22 cents a share, a year earlier. Revenues at AOL climbed 2 percent to $538.3 million, an increase from $529.4 million in the same period a year ago.
Those results just beat Wall Street's projections. Analysts were anticipating profits of 32 cents a share and revenues of $537 million, according to Thomson Reuters. Investors, however, did not like what they saw. AOL's shares were down 7.61 percent to $38.27 as of 9:40 a.m. EST.
AOL's advertising business jumped 8 percent to $359.2 million. The growth helped justify AOL's heavy investment in media properties such as the Huffington Post and Patch and was able to cushion declines in AOL's subscription business.
Subscriptions for AOL's internet service continued their precipitous drop, falling 9 percent to $165.8 million.
For the record: An earlier version of this article incorrectly stated that analysts projected earnings of 33 cents per share.