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AOL Earnings: Profits Soar on Cost Cutting, But Revenues Still Down

Company continues to struggle in attempt at reinvention

AOL delivered its quarterly earnings report on Wednesday, and had some good news — and bad news — for its investors.

The Good: AOL's net income soared to $66.2 million during the fourth quarter of 2010 — beating Wall Street analysts' expectations. The profits were the result of severe cost-cutting as AOL chief Tim Armstrong tries to reinvent AOL as a content company not-so-far removed from a dial-up service.

The Bad: The company's revenues fell 26 percent to $596 million during the quarter — and ended the year down 26 percent, too. Ad revenue was down 29 percent, with display ads down 14 percent.

The (Potentially) Ugly: According to Business Insider, "Armstrong's lieutenants are making their way through the company's many editorial divisions," training them on something called "The AOL Way" — a cultish-sounding document that the site obtained and leaked on Tuesday.

Armstrong, unsurprisingly, is focusing on the good.

"I am very proud of what we accomplished in 2010 as we began the year with a significant restructuring of AOL and ended the year with a significantly improved balance sheet, a number of exciting new products and a new culture focused on winning," Armstrong said in a statement. "We have set aggressive goals for ourselves in 2011 in pursuit of capturing the growing opportunity ahead of us.”

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