Internet portal

Lycos

(LCOS)

, which

Terra Networks

(TRRA)

of Spain agreed to

purchase for $12.5 billion in stock on Tuesday, announced earnings that surpassed Wall Street's expectations by 2 cents, with a 120% increase in revenue.

For the third quarter ended April 30, the Waltham, Mass.-based company posted pro forma net income of $7.9 million, or 7 cents a diluted share, as opposed to a net loss of $955,000, or 1 cent a share a year earlier. The consensus estimate of analysts polled by

First Call/Thomson Financial

was 5 cents in the latest quarter.

The pro forma figures exclude the amortization of goodwill, merger-related expenses and other non-recurring items. Including those items, Lycos reported net income this quarter of $122.4 million, or $1.05 a diluted share.

Revenue rose to $78.6 million, from $35.8 million a year earlier.

Terra's acquisition of Lycos is the first of a large U.S. Internet company by a European Internet access provider, giving Terra a wide opening into North America to sell its Web services to the expanding Hispanic population in the U.S.

Lycos is the fourth-largest Internet portal in the U.S. -- behind

America Online

(AOL)

,

Yahoo!

(YHOO)

and

Microsoft

(MSFT) - Get Report

-- with 32.9 million unique visitors in March as measured by

Media Metrix

. Worldwide traffic in April increased 21% to an average of 148 million page views a day from a year ago.

Shares of Lycos closed Wednesday trading down 14 5/8, or 20%, to 57 39/64.