Earnings spoiled the party and there was a strong reaction. There has been some recovery, and it is likely that the stock may continue to grind and consolidate around the current levels. Though the results may not have met the analysts estimates for earnings, they did not appear to be that bad either. The total revenues grew 2% to $538 million and the net income grew by 23% to $25.9 million. The EPS grew by 45% to $0.32, and the cash generated from operations increased by 104% to $40.6 million (all this on a yoy basis). The problem was that the expected sequential growth (QoQ) did not continue. In fact the revenues fell 10% from $599.50 million and the net income fell 27% from $35.70 million in Q4'12. The buoyancy after the Q4'12 earnings was mainly due to sequential growth. Goldman Sachs (GS) has maintained its neutral rating for the stock while increasing the price target from $35 to $39. So it seems that there will be some brakes put on the momentum. But in the slightly longer term, the low valuations may attract investors and AOL may be able to deliver decent returns to investors. In the last two years it has appreciated by more than 100%, and in addition, there was a one time dividend related to sale of the licenses in Q2'12. Patent monetization / licensing is big business with even smaller companies trying hard to develop technologies or acquire patents. A medical device company PLC Systems (PLCSF) had sold its product heart laser in 2011 to concentrate on the more potential product (RenalGuard) for which it subsequently obtained several US and European patents. For AOL, the reaction to the results seems to be overdone and perhaps over. The expectations from the next quarter will be more muted which may make it a little easier for the stock to breathe. However, more negative surprises may surely do serious damage to the sentiments.