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By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Yahoo Inc (O:YHOO) reported a modest increase in revenue during the third quarter, exceeding lacklustre Wall Street targets, as the Internet company's online display advertising business continued to struggle.
Shares of Yahoo rose 3 percent to $41.40 in extended trading on Tuesday.
For the first time Yahoo disclosed its mobile revenue, which it said was more than $200 million (124.13 million pounds) in the third quarter. Yahoo said it expects that gross mobile revenues for the full year will exceed $1.2 billion.
Yahoo's revenue, excluding fees shared with partner websites, was $1.094 billion in the three months ended Sept. 30, a 1 percent increase from $1.081 billion in the year ago period.
Analysts polled by Thomson Reuters I/B/E/S were looking for adjusted revenue of $1.045 billion.
Yahoo's revenue growth has stalled in recent years as its once-hot Web portal and email service have lagged rivals such as Google Inc (O:GOOGL) and Facebook Inc (O:FB).
Yahoo said that it's display advertising revenue, which accounts for roughly 40 percent of Yahoo's total revenue, declined 5 percent in the third quarter. Revenue from Yahoo's search business rose 4 percent year-on-year to $452 million.
(Reporting by Alexei Oreskovic; Editing by Chris Reese, Bernard Orr)