Yahoo adjusted profit tops Wall St. average

SAN FRANCISCO (Reuters) - Yahoo Inc (YHOO.O) on Tuesday posted quarterly profit, excluding one-time items, at the top end of Wall Street's range of lowered forecasts, as it sought to bolster its case that Microsoft Corp's (MSFT.O) takeover bid undervalues it.

Buoyed by a large gain on a stake in China's Alibaba.com Ltd (1688.HK), Yahoo's first-quarter net income rose to $542.2 million, or 37 cents per diluted share, compared with the year-ago quarter's $142.4 million, or 10 cents per diluted share.

Excluding one-time items and stock compensation costs, the beleaguered Internet company reported a profit of $150 million, or 11 cents per share.

On that basis, Wall Street on average was looking for a profit of 9 cents per share, compared with 11 cents a share a year earlier, according to Reuters Estimates.

(Reporting by Eric Auchard; Editing by Braden Reddall)