Yahoo Inc. has reported a more than three-fold increase in profits for the July to September period as compared with the same period last year.

Yahoo Inc. said profits surged owing to cost-cutting measures such as laying-off workers and eliminating unpopular internet services.

California-based Yahoo Inc's net income was reported at 13 cents a share, up by 244 per cent from last year.

However, company's revenue dropped by about 12 per cent for the third consecutive quarter.

Yahoo Inc.'s revenue slipped to $1.58 billion, representing a plunge of about 12 percent from last year.

Yahoo Inc.'s CFO Tim Morse said, "The theme for the third quarter was stabilization, as we saw strength in key areas of our business after two straight quarters of deceleration."

Yahoo Inc. expects revenue of $1.6-$1.7 billion from the fourth quarter, with operating income of $135-$155 million.

In the after-hours trading, shares in Yahoo Inc. gained more that 5 per cent to $18.04.