AOL Inc. (NYSE: AOL) released first-quarter 2014 results before markets opened on Wednesday, and the Internet media company posted diluted earnings per share (EPS) of $0.11 on revenues of $583.3 million. In the same period a year ago, the company reported EPS of $0.32 on revenues of $538.3 million. First-quarter results also compare to the Thomson Reuters consensus estimates for an EPS of $0.45 and $577.7 million in revenues.

If revenue is the good news and profit is the bad news, the not-so-good news is that cash flow slipped $17 million and free cash flow slipped $20 million, which the company attributed to timing on a payment from a large partner. Membership revenue continues to decline, as does display ad revenue. None of this is really new this quarter, but it is helping push shares down in the premarket.

The company’s CEO said:

Q1 marks the 5th consecutive quarter of consumer, revenue and Adjusted OIBDA [operating income before depreciation and amortization] growth. AOL’s investment in global media and technology platforms is allowing AOL to compete on a global scale.

The company’s total advertising revenue grew by 16% year-over-year in the first quarter. The largest part of that came in third-party revenue, which grew by 55%. AOL’s traffic acquisition costs (TAC) rose $53 million, accounting for about 83% of the rise in the company’s cost of revenues.

We will have to wait for the conference call for any guidance, but the consensus estimate for the current quarter calls for EPS of $0.50 on revenues of $592.92 million. For the full year, the estimate for EPS is $2.25 on revenues of $2.53 billion.

AOL shares closed at $43.90 Tuesday, and slipped about 7% in premarket trading Thursday to $40.80. The stock’s 52-week range is $32.19 to $53.28. The consensus target price for the shares was around $52.60 before this report.

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