UPDATE 1-Russia's Yandex upgrades FY revenue outlook, shares climb

(Adds detail, analyst comment)

MOSCOW, April 28 (Reuters) - Russian internet giant Yandex on Wednesday reported a 43% drop in first-quarter adjusted net income compared with last year but raised its 2021 revenue forecast as the recovery in its core advertising business continued after an early pandemic hit.

The advertising business was hurt during the early stages of COVID-19 but other segments such as food delivery and e-commerce boomed as people adapted to using online services when restrictions kept them at home.

Yandex, which plans to spend $400-500 million on an e-commerce drive this year to tap into surging demand for online services, said it expected full-year revenue to reach 315 billion-330 billion roubles ($4.2-4.4 billion).

It had previously forecast it to reach 305-320 billion roubles.

By 1141 GMT, Yandex shares in Moscow were up 1% on the day, having earlier hit their highest since April 13, returning close to levels seen before the Federal Antimonopoly Service (FAS) initiated proceedings against the company over alleged competition law violations on its search engine, charges Yandex denies.

Adjusted net income stood at 2.2 billion roubles, while first-quarter revenue, now including its Yandex.Market e-commerce venture, stood at 73.1 billion roubles, up 39% year-on-year.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were up 5% year-on-year to 10.4 billion roubles.

Further growth acceleration in search and taxi helped Yandex’s results for revenue and EBITDA beat the consensus forecast, BCS Global Markets said in a note.

Revenue in the taxi segment, which includes its ride-hailing arm Yandex.Taxi, grew 89% in the first quarter to 26.6 billion roubles helped by an increase in the number of rides and a surge in prices in January and February when extreme weather conditions brought about strong demand.

Total gross merchandise value (GMV) of Yandex’s e-commerce operations - Yandex.Market, e-grocery service Yandex.Lavka and the grocery portion of its food delivery service Yandex.Eats - jumped 186% year-on-year to 24.7 billion roubles. ($1 = 74.8075 roubles) (Reporting by Anna Rzhevkina and Alexander Marrow, editing by Louise Heavens and Emelia Sithole-Matarise)