InfoSpace topped analysts' reduced estimates in its first quarter Wednesday but still posted a loss of $5.5 million, or 2 cents a share, on sales of $46.6 million.
First Call consensus expected the provider of technology and services for online content and commerce to lose 4 cents a share in the quarter.
InfoSpace (Nasdaq: INSP) shares closed up 36 cents to $3.91 ahead of the report before moving up to $4.17 in after-hours trading.
The $46.6 million in sales marks a 20 percent improvement from the year-ago quarter when it earned $14.8 million, or 4 cents a share, on sales of $38.8 million.
But sales fell 30 percent from the prior quarter when it earned $12.6 million, or 4 cents a share, on sales of $66.1 million.
In his first quarter back at the helm since a management shakeup in late January, Chief Executive Officer Naveen Jain said he was most pleased by the company's improved wireless sales.
"Our wireless business has never been stronger," Jain said during a conference call with analysts. "InfoSpace has the staying power needed to move forward in this business."
InfoSpace exited the quarter with more than 2 million registered wireless subscribers and derived more than 20 percent of total sales from these customers.
Scott Sunderland, an analyst at Wedbush Morgan Securities, pegged InfoSpace for a loss of 3 cents a share on sales of $48.4 million. He said the acceleration of the company's wireless business will be crucial to the InfoSpace's long-term prospects.
"They have the right idea and all the pieces," Sunderland said. "Their wireless business is starting to show some improvement. But they really need to execute for the next two quarters while maintaining their solid technology."
Peter Friedland, an analyst at WR Hambrecht, was less optimistic, predicting a loss of 4 cents a share on sales of $45 million.
"Their wireless business is clearly the growth engine for the company," he said. "To grow this business, InfoSpace is going to need more partnerships, particularly with international carriers."
Back in February, InfoSpace told analysts to expect a return to profitability by the third quarter of this year. As part of its efforts to achieve this goal, the company axed 21 percent of its work force.
The layoffs and revised outlook came just one month after Jain replaced Arun Sarin as the company's chief executive. Sarin, who previously held an executive position at Vodafone (NYSE: VOD) served as CEO for only eight months.
"InfoSpace has great technology and a great vision," one analyst said. "The only problem Wall Street has with the stock right now is the management."
InfoSpace exited the quarter with more than $500 million in cash and short-term investments.
Its shares rallied up to a 52-week high of $78.81 last April before plunging to a low of $1.56 earlier this month.
Eight of the 16 analysts tracking the stock rate it a "hold."