Shares of the company were up 11.33 per cent as at about 10 a.m. EDT, trading at $34.97.
For the quarter that ended December 31, net earnings stood at $35.7 million or 41 cents per diluted share, compared to $22.8 million or 23 cents per diluted share, a year earlier.
Excluding some items, per-share earnings were 55 cents, topping the 53 cents analysts predicted, according to Bloomberg.
Total sales grew four per cent to $599.5 million, the first fourth quarter year-over-year revenue growth in eight years as global advertising revenue increased, the company said.
Analysts had forecast revenue of $573.71 million.
“AOL returned to growth and generated significant value for shareholders in 2012,” said chairman and CEO Tim Armstrong.
“AOL has strong momentum entering 2013 and is positioned to continue on our growth path by executing our strategy to build the next generation media and technology company.”
Global advertising revenue grew 13 per cent to $410.6 million, from $363.8 a year earlier. AOL said the increase was largely due a 31-per-cent increase in third party network revenue and a 17-per-cent rise in search revenue.
Subscription trends continued to improve, with a narrower 10-per-cent decline in subscription revenue year-over-year and a 1.8 per cent monthly average churn – the percentage of subscribers that cancel services. This compares to an 18-per-cent decline in revenue and 2.2-per-cent monthly average churn, a year ago.
The company had 2.8 million subscribers in the fourth quarter, down 15 per cent from 3.3 million a year ago. Average revenue per user grew eight per cent to $19.27, from $17.87 a year earlier.
The company said unique visitors to AOL properties were 113 million, representing growth of six per cent year-over-year.
Its brand group, which consists of content and service brands including AOL.com, the Huffington Post, Patch, TechCrunch and MapQuest, posted a four-per-cent increase in revenue of $213.2 million as search advertising revenue grew 20 per cent year-over-year.
The membership group, which include AOL’s subscription offerings and advertising offerings such as AOL Mail, saw revenue fall nine per cent to $230.8 million on a 10-per-cent decline in subscription revenue driven by 15-per-cent fewer domestic AOL-brand access subscribers year-over-year.
Meanwhile, AOL networks, which include Advertising.com, saw revenue jump 37 per cent to $183.5 million as third party network revenue grew 31 per cent.
The company's board also authorized a stock buyback program of up to $100 million.