Yahoo Inc forecast first-quarter revenue to be flat to slightly higher compared with a year earlier, after posting fourth-quarter results that were broadly in line with market expectations.

Shares of Yahoo rose 1.5 percent in after-hours trade, adding to a gain of 0.8 percent in the regular session.

The Sunnyvale, California-based Internet company reported net income of $153 million in the fourth quarter, or 11 cents a share, matching analysts' average per-share forecast.

In the year-ago period, Yahoo had a net loss of $303 million, or 22 cents per share, after more than $500 million of write-downs and restructuring charges.

Yahoo said revenue in the three months ended December 31 totaled $1.73 billion, compared with $1.81 billion in the fourth quarter of 2008.

Excluding traffic acquisition costs, Yahoo said revenue was $1.26 billion, a hair above the average analyst expectation of $1.23 billion, according to Thomson Reuters I/B/E/S.

Looking ahead, Yahoo said revenue in the first quarter would range from $1.575 billion to $1.675 billion.

The midpoint of the range would represent the first year-on-year revenue increase in six quarters.

Our business has positive momentum and we feel good as we head into 2010, Chief Executive Carol Bartz said in a statement. We're pleased that the midpoint of our Q1 revenue outlook marks the first quarter of year-over-year growth in six quarters.

Yahoo said display advertising revenue grew 26 percent in the fourth quarter compared to the third quarter, and was up 16 percent from the same period in 2008.

Shares of Yahoo rose to $16.23 in after-hours trading, from their Nasdaq close of $15.99.

(Reporting by Alexei Oreskovic; Editing by Ted Kerr)