Internet company AOL Inc. said Wednesday that tumbling advertising and subscription revenue, along with restructuring costs, led to a 58 percent decline in first-quarter profits.
Shares slid 3.6 percent to $27 before the market opened.
The New York company earned $34.7 million, or 32 cents per share, compared with $82.7 million, or 78 cents per share, in the year-ago quarter.
Revenue fell by 23 percent to $664.3 million, led by a 28 percent decline in subscription revenue. Results came in below analysts' expectations, which were 70 cents per share in profit and revenue of $679 million.
Overall advertising revenue fell by 19 percent to $354.3 million. Display ads slid 13 percent while search and contextual ads fell 27 percent.
AOL also says it sold its ICQ instant messaging business to Internet investor Digital Sky Technologies Ltd. for $187.5 million.
The company said earlier this month that it plans sell or close its social networking site Bebo, about two years after spending $850 million to acquire it.
AOL separated from parent Time Warner Inc. late last year. The company was a pioneer when it began offering dial-up Internet access service, but that business declined as better technology evolved, giving consumers much quicker access.
The company has attempted to reinvent itself as a content and advertising business, operating websites like tech blog Engadget and personal finance site WalletPop. The restructuring process hasn't been easy and AOL said disruptions have cut into revenue in the quarter.
In contrast, Google Inc.'s first-quarter revenue rose 23 percent, and Yahoo Inc. said its first-quarter revenue rose 1 percent. Most of their revenue come from online ads.
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