Yahoo adjusted profit tops Wall St. average

The Time Square Yahoo sign is seen in New York April 7, 2008. REUTERS/Joshua Lott

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 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