Shares of AOL Inc., the Web publisher that owns the Huffington Post and TechCrunch, climbed the most Friday in three months in New York trading after the company posted its first sales gain in eight years.
Fourth-quarter sales rose 3.9 percent from a year earlier to $599.5 million. Analysts had estimated that revenue would drop to $566.7 million in the period. The surprise growth came largely from AOL’s third-party ad sales business, which helps other Web publishers sell ad space through automated systems.
“The future of advertising is going to be more machine-to-machine trading,” Chief Executive Officer Tim Armstrong said in an interview, referring to the rise in trading desks that are used to buy and sell digital ad inventory, similar to the way stock markets work. “There will also be growth in the human side of buying as well.”
The shares advanced 7.4 percent to $33.72, the biggest one-day increase since November. AOL’s stock has surged 86 percent in the past 12 months.
AOL, which was spun off from Time Warner Inc. in 2009, said total advertising rose 13 percent to $410.6 million in the quarter. Net income rose to $35.7 million, or 41 cents a share, from $22.8 million, or 23 cents, a year earlier. The company also authorized $100 million in stock repurchases over the next 12 months. It spent almost $700 million on buybacks in 2012, reducing its shares outstanding by 19 percent.
Search advertising increased 17 percent in the fourth quarter to $103.6 million. Display advertising — a category that includes banners and video — was little changed at $169.8 million. Armstrong has spent more than $600 million on Web publishing, acquiring the Huffington Post in 2011 for $315 million and investing more than $300 million to develop Patch, a local-news division that he said should start becoming profitable by the end of this year. Patch generated less than $40 million last year, missing targets by about 25 percent, according to Armstrong.