Yahoo! said its fourth-quarter earnings beat expectations on strong advertising revenue at the Internet directory company, before a charge resulted in a final loss.

The No. 1 Internet directory's profit before a charge was $2.57 million, or 5 cents a diluted share, compared with a loss of $666,000, or 2 cents a share, in the year-earlier period. Wall Street expected the company to earn 3 cents a share, the average estimate of 13 analysts polled by IBES International Inc. Yahoo!, the most popular Internet search service, was the best-performing US stock last year, soaring 511 per cent.