AOL Q1 2012 EarningsUPDATE, 6:35 AM: “I don’t see a resolution on the horizon” in AOL‘s battle with activist investor Starboard Value, CEO Tim Armstrong told analysts this morning. The hedge fund, which owns 5.3% of AOL shares, is waging a proxy fight as it attacks Armstrong initiatives including his investment in the Patch local news service and acquisition of the Huffington Post. Starboard is challenging the company’s nominated slate of directors with three of its own candidates — including Starboard CEO Jeffrey Smith — for the election that will take place at AOL’s annual meeting June 14. “We feel pretty good about our position in that,” Armstrong says. But he adds that it’s “not helpful to have a lot of noise around our content business” just as AOL enters the upfront ad-buying season. He urged investors not to “mistake that noise for what we’re doing.”

PREVIOUS, 4:43 AM: There isn’t much the company can do about the continuing slide in its dial-up Internet connections, but it found something to cheer about in growing ad sales. The Internet company reported net income for Q1 of $21M, up from $4.7M in the period last year, on revenues of $529.4M, down nearly 4%. The revenue figure topped analysts’ $526.5M forecast. And earnings, at 22 cents a share, were way ahead of the 7 cent projections. AOL says that global ad sales improved 5%. Display revenues were up slightly as a 34% gain overseas outweighed a 1% drop in the U.S. Still, subscription revenues fell 15% as the number of people using AOL’s service domestically fell by 157,000 since the beginning of the year to 3.1M. The company says that the rise in profits is partly due to cost controls, including layoffs. “In 2012 and beyond we are simultaneously focused on the continued successful execution of our strategy and on creating and unlocking value for our shareholders,” CEO Tim Armstrong says.