(By Balaseshan) Struggling internet company Yahoo! Inc. (NASDAQ: YHOO) reported an increase in quarterly adjusted earnings helped by modest growth in both display and search revenue. Despite earnings exceeding Street's expectations, revenue missed consensus.
Adjusted earnings grew to $420.68 million or $0.35 per share for the third quarter from $266.35 million or $0.21 per share in the year-ago quarter.
Revenue, excluding traffic acquisition costs (TAC), increased 2 percent to $1.089 billion. Excluding TAC, display revenue rose 0.5 percent, while search revenue grew 10.6 percent.
Analysts, on average, polled by Thomson Reuters expected earnings of $0.22 per share on revenue of $1.10 billion for the third quarter.
For the second quarter of 2012, Yahoo earned 27 cents a share on revenue excluding TAC of $1.081 billion.
Total operating expenses rose 1 percent to $1.05 billion.
"We're taking important steps to position Yahoo! for long-term success, and we're confident that our focus on quality and improving the user experience will drive increased value for our advertisers, partners and shareholders," said Marissa Mayer, CEO of Yahoo.
Recently, Yahoo strengthened its executive team, appointing Henrique de Castro as chief operating officer; Ken Goldman as chief financial officer; Ron Bell as general counsel; Jacqueline Reses as executive vice president of people and development; and Kathy Savitt as chief marketing officer.
The stock, which has been trading between $14.35 and $16.75 over the past year, ended Tuesday's regular session down 0.44 percent at $15.77.