Yahoo is making more money under CEO Marissa Mayer, even as the Internet company struggles to sell more of the ads that bring in most of its revenue.

The latest signs of earnings progress came Tuesday with the release of Yahoo’s first-quarter earnings report.

The numbers also show further signs of decay in Yahoo’s sales of display ads. On the plus side, Yahoo’s ad revenue tied to search results rose.

Investors seemed more worried about the downturn in Yahoo’s display advertising than the surge in the company’s earnings. Yahoo’s stock sank $1.04, or 4.4 percent, to $22.75 in extended trading.

The negative reaction suggests that some investors may be losing their faith in Mayer, a respected executive who defected from Google Inc. to join Yahoo nine months ago. Yahoo’s stock had been up by more than 50 percent since Mayer’s arrival, thanks largely to the rising value of Yahoo’s 24 percent stake in Chinese Internet company Alibaba Group.

Investors have been counting on Mayer to duplicate some of the success she enjoyed while helping to build Google Inc. into the Internet’s most powerful company. She was a top Google executive for 13 years.

Yahoo Inc. earned $390 million, or 35 cents per share, during the first three months of the year. That’s a 36 percent increase from income of $286 million, or 23 cents per share, at the same time last year.

If not for expenses covering employee stock compensation and certain other costs, Yahoo said it would have earned 38 cents per share. That was well above the average estimate of 25 cents per share among analysts surveyed by FactSet.

In an unpleasant surprise, revenue fell 7 percent from last year to $1.1 billion.

After subtracting ad commissions, Yahoo’s revenue stood at $1.07 billion, about $30 million below analyst projections.

The weak spot came in display advertising, which is used to be Yahoo’s strength. Excluding ad commissions, Yahoo’s first-quarter display advertising revenue fell 11 percent from last year to $402 million.

Mayer has been trying to make Yahoo’s online services more engaging and easier to use in hopes that the improvements will encourage Web surfers to visit more frequently and stay for longer. That would help Yahoo sell more advertising to marketers who have been funneling more of their online budgets to Google and Facebook Inc. in recent years. Mayer also has been trying to recast Yahoo’s services so they are better suited for the growing audience consuming content on smartphones and tablet computers.

As part of a makeover under Mayer, Yahoo has redesigned its home page, email service and Flickr photo-sharing service. The company, which is based in Sunnyvale, Calif., also has made a series of small acquisitions aimed primarily at attracting more engineers with expertise in mobile applications and social networking.

Those changes haven’t been enough to generate a large enough increase in Yahoo’s revenue to match the growth at the other major players in the Internet ad market. Google’s ad revenues have been climbing by about 20 percent in recent quarters while Facebook’s has been surging by about 40 percent. Google is scheduled to report its first-quarter results Thursday while Facebook plans to post its numbers on May 1.

Yahoo also has been lagging the growth in the overall ad market, a trend expected to continue at least through the rest of this year. In Yahoo’s main market, the U.S., the company’s ad revenue this year is expected to increase by about 3 percent, according to the research firm eMarketer. That contrasts with an anticipated 25 percent gain in overall spending on digital ads in the U.S. this year, eMarketer said.