The stock is up about 7% in early trading. AOL reported net income of $20.7M, up from a $2.6M loss in the quarter last year, on revenues of $531.7M, unchanged. That’s a bit of a surprise: Analysts expected revenues to slip to $521.6M. Earnings per share of 22 cents also beat the consensus forecast of 17 cents. The company says that global ad sales were up 7% to $248.2M, although domestic display was down 3% to $122.5M. AOL crows that traffic at its Patch local news service was up 19% in September vs the same month last year to 11.9M unique visitors. In addition it says that the AOL On Network “grew rapidly” and is now the No. 2 video network by views. Subscriptions to its mostly dial-up Internet service continued to fall, but the 10% revenue decline, to $173.5M, was an improvement vs last year when revenues dropped 22% in the quarter. “We just reported the best relative revenue performance in seven years and the second consecutive quarter of year-over-year profit growth exceeding our expectations,” CEO Tim Armstrong says.

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