Yahoo, Inc. shares rose more than 9% after the company beat earnings and revenue estimates and posted stronger than expected display ad revenue.
Yahoo's sales fell slightly in its first quarter to $1.13 billion, down one percent year-on-year. Excluding traffic acquisition costs, revenue for Q1 rose by one percent to some $1.09 billion.
On the other hand, Yahoo's quarterly net earnings plunged by 20 percent to $312 million. Net earnings per share for the quarter were $0.29, 17 percent lower on-year. On a non-GAAP basis, Yahoo's net earnings per share stood at $0.38.
Yahoo's display revenue remained flat at $453 million for the first quarter. The number of display ads sold rose by seven percent but the price per ad fell by five percent.
Yahoo reported a small gain in the number of mobile users to 430 million monthly users, up from 400 million reported earlier this year. Analysts said Yahoo is having a hard time significantly monetizing its services on mobile. In January, Yahoo said its revenue from mobile products was still not material to its business.
CEO Marissa Mayer said she was pleased by the company's revenue. She said the quarter "was an early and important sign of growth in our core business."
Since becoming CEO in 2012, Mayer has tried to turn Yahoo around through a series of moves that include acquisitions and redesigned products. Large gains in advertising have proven much harder, however.
Yahoo's search revenue for the quarter increased by five percent to $445 million compared to the fourth quarter of 2013 when Yahoo reported a four percent drop in search ad revenue. Yahoo, however, is being hamstrung from exploiting search much further because of its deal to use Microsoft's Bing search engine.