you can declare the label before you actualy call the New...
Dim label1 as Label
labelarea(312, 344, 64, 40, " text here ", label1)
Public Sub labelarea(ByVal x As Integer, ByVal y As Integer, ByVal width As Integer, ByVal height As Integer, ByVal textValue As String, ByVal labels As Label)
labels = New Label
labels.Location = New System.Drawing.Point(x, y)
labels.Name = "Label1"
labels.Size = New System.Drawing.Size(width, height)
labels.BorderStyle = BorderStyle.FixedSingle
labels.Text = textValue
labels.TextAlign = ContentAlignment.MiddleCenter
Me.Controls.Add(labels)
End Sub