Yahoo sales guidance misses estimates, shares wobble

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Yahoo posted quarterly earnings and revenue that missed Wall Street expectations Tuesday and also handed in current-quarter sales guidance that fell short of estimates. But shares still poked higher in extended-hours trading after the firm said it won't have to sell as much of its Alibaba stake.

The company handed in a profit of 37 cents a share on sales of $1.04 billion, missing expectations for 38 cents a share, after deducting traffic acquisition cost, on $1.08 billion in revenue, according to a consensus estimate from Thomson Reuters.

Adding to woes, the company said it expects to hand in current-quarter revenue of between $1.02 billion and $1.06 billion versus Wall Street estimates of $1.10 billion.

"Our top priority is revenue growth and by that measure, we are not satisfied with our Q2 results," said CEO Marissa Mayer, in a press release. "While several areas showed strength, their growth was offset by declines...I believe we can and will do better moving forward. Overall, I remain confident in Yahoo's future, our strategy, and our return to long-term growth."

Meanwhile, the Internet company announced that Alibaba, in which Yahoo has a 24 percent stake, has agreed to an amendment to the share repurchase deal that lowers the maximum number of shares that Yahoo is required to sell after Alibaba's initial public offering. After the Chinese Internet firm's IPO, Yahoo will be required to sell 140 million shares, down from an initial amount of 208 million.

Yahoo shares fell nearly 2 percent in extended hours trading. (Click here to get the latest quotes.)

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—By CNBC.com

CNBC's Cadie Thompson contributed to this report.