AOL shares jump on advertising revenue

Shares in AOL have jumped 22% after the US internet firm reported a sharp rise in advertising revenues.

Advertising sales jumped 7% to $340m (£212m), boosting net profit for the third quarter to $20.8m, compared with a loss of $2.6m a year ago.

Overall revenue was flat at $531.7m, the first time year-on-year revenue has not fallen in seven years.

The firm has struggled to reinvent itself as a media and news group since its spin off from Time Warner in 2009.

'Right direction'

"We just reported the best relative revenue performance in seven years and the second consecutive quarter of year-over-year profit growth, exceeding our expectations," said group chief executive Tim Armstrong.

Analysts said the results showed the company was finding its feet again after a difficult three years.

"Things look great," said Andre Sequin from RBC Capital Markets.

"This company is continuing to make steps in the right direction."

The company is still losing subscribers, however, albeit at a slower pace.

Subscriptions during the quarter fell by 10% against a year earlier, an improvement on the 22% fall recorded in the third quarter of 2011.