The shares dived 7.8 percent to $40.49 at 8:15 a.m. in New York.
Net income retreated to $9.3 million, or 11 cents per share, in the three months ended March 31, from $25.9 million, or 32 cents per share, a year earlier, the New York-based company said in a statement today.
AOL said earnings were hurt by $22 million in restructuring and asset impairment charges.
Excluding those charges, adjusted earnings-per-share would have been 34 cents, far below analysts' average estimate of 45 cents per share.
Revenue grew 8 percent to $583.3 million, above analysts' consensus of $578 million.
The company's advertising revenue rose 16 percent to $433.4 million.
Search advertising revenue fell 1 percent and global display revenue slid 3 percent. Internet-access subscription revenue declined 10 percent to $149.9 million.
The company also missed on another metric it uses to measure its operating performance, adjusted OIBDA, or operating income before depreciation and amortization. OBIDA was $107 million, $5 million below expectations of $112 million. That was up by only 2 percent.
AOL, which owns the Huffington Post news website and the TechCrunch blog, said yesterday that it bought Convertro, a big-data tool for online marketers, for about $101 million. Convertro helps clients gauge how their advertising efforts are working and use the data to drive programmatic buying strategies across all platforms.