MarketWatch First Take: Local ads send Yelp to surprise profit

Yelp Inc. seems to be turning around, reporting an unexpected profit on Tuesday fueled by strong sales of local ads, giving credence to changing sentiment on Wall Street toward the company.

Earlier Tuesday, online review pioneer Yelp YELP, +3.03%reported a slight net profit of one cent a share, compared with a loss of two cents a share a year ago, and revenue growth of 30% to $173.4 million. Fueled by a 41% jump in local revenue, Yelp showed upside in all its sales channels and better revenue retention, Chief Executive Jeremy Stoppelman said.

Yelp also raised its revenue and earnings guidance for the rest of the year, and executives on the company’s conference call said the company still has room to grow in local ads, where its team of more than 2,000 sales reps sell to local businesses.

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