Asset sales boosted IAC/InteractiveCorp. (IACI) to a third-quarter profit, despite revenue declines that show Barry Diller's digital media empire continuing to struggle through the recession and advertising slump.

IAC, which split into five different companies just over a year ago to slim down its sprawling portfolio, has swung to a profit in three of the past four quarters following the restructuring, although revenue has been falling in a weak advertising environment.

The parent of properties like Ask.com and Match.com benefited in the third quarter from the sale of its Match Europe unit and shares in OpenTable Inc. (OPEN), along with year-ago write-downs. But its underlying performance exceeded expectations as investors continue to be lured by its $1.8 billion cash reserve.

Shares of IAC rose 4.1% to $20.15 in early trading Tuesday.

RBC Capital Markets analyst Ross Sandler noted that while IAC repurchased 5.6 million shares in the quarter, its buyback slowed over the summer as the company held talks with Liberty Media Corp. (LCAPA, LINTA, LMDIA) about the repurchases. The media empire controlled by John Malone has been selling part of its stake in IAC.

"IAC stated that discussions have terminated, so we expect buybacks to resume," said Sandler.

IAC posted earnings of $21.3 million, or 16 cents a share, compared with a year-earlier loss of $15.2 million, or 11 cents a share. The latest results included $35 million in gains tied to the sale of OpenTable stock and the sale of Match Europe, while year-earlier results included expenses tied to the company's breakup.

Excluding items earnings were 34 cents a share, compared with a year-ago loss of 14 cents a share. Analysts surveyed by Thomson Reuters projected earnings of 13 cents a share.

Revenue decreased 8.9% to $336.6 million but also beat expectations for revenue of $335 million.

Earnings before amortization in the media and advertising segment, which includes Ask.com, fell 30% amid higher traffic acquisition costs and an 11% drop in revenue.

The Match unit, known for Match.com and Chemistry.com dating services, posted a 12% profit decline as revenue fell 13%. Excluding Match Europe and PeopleMedia, revenue rose 5% during the quarter driven by a 9% increase in U.S. subscribers.

-By Nat Worden, Dow Jones Newswires; 212-416-2472; nat.worden@dowjones.com

(John Kell contributed to this story.)