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AOL loses less than expected

Company's results were better than Wall Street expectations. Meanwhile, AOL continues to invest in its Patch local-news effort.

AOL reported today a loss, flat traffic, and a 6 percent revenue decline, but is showing progress as it increased its advertising business in the third quarter.

In other words, AOL delivered yet another mixed bag of results that will give believers some optimism with enough problem areas to arm critics.

The company reported a third quarter net loss of $2.6 million, or 2 cents a share, on revenue of $531.7 million, down 6 percent from a year ago. Advertising revenue was up 8 percent from a year ago to $317.7 million.

Wall Street was expecting a loss of 6 cents a share on revenue of $524 million.

On a conference call with analysts, AOL CEO Tim Armstrong said: "The trajectory of the results shows where we were from a year ago in a pattern of advertising growth. This reflects continued execution of our strategy, becoming the branded scale media and technology company for the Web with great experiences for consumers and deep relationships with world class brands and advertising agencies."

Armstrong then touted AOL's cost control as well as the company's repositioning in key verticals. "We are building experiences that stand on PCs, tablets, mobile devices and plasma screens," said Armstrong.

AOL said its results show a turnaround in progress as its revenue declines eased. In a statement, AOL delivered this quirky line: "AOL substantially closed the gap to becoming a top-line growth company once again with its total revenue decline of 6 percent, marking the lowest level of decline in 5 years, driven by the second consecutive quarter of year-over-year global advertising revenue growth."

The company added that it continues to invest in its Patch local news effort. Patch passed 10 million monthly unique visitors and has 10,000 bloggers. The Huffington Post topped 35 million monthly unique users in the third quarter. AOL's subscription dial-up business saw revenue fall 15 percent in the third quarter, but churn was 2.2 percent.

Overall, AOL's domestic unique average monthly unique users were 107 million, up 1 percent from a year ago. The Huffington Post Media Group had 97 million average uniques in the quarter, flat with a year ago.

This story originally posted as "AOL Q3 loss better than expected, mixed bag overall" on ZDNet's Between the Lines.