Yahoo Q3 results exceed analyst projections

Yahoo ushered in Marissa Mayer as its new CEO with a third-quarter earnings report that topped analyst estimates. The results announced Monday show Yahoo’s net revenue barely grew at a time when advertisers are spending more money marketing their products and services online. Nevertheless, the numbers were slightly better than analysts projected. Yahoo hired Mayer […]

Yahoo ushered in Marissa Mayer as its new CEO with a third-quarter earnings report that topped analyst estimates.

The results announced Monday show Yahoo’s net revenue barely grew at a time when advertisers are spending more money marketing their products and services online.

Nevertheless, the numbers were slightly better than analysts projected. Yahoo hired Mayer away from rival Google Inc. to orchestrate its latest turnaround attempt in mid-July, shortly after the quarter started.

Investors applauded the early progress reflected in Monday’s report. Yahoo shares gained 48 cents, or 3%, to $16.25 in extended trading.

The company earned $3.2 billion, or $2.64 per share, in during the three months ending in September. Most of that profit stemmed from a one-time gain of $2.8 billion that Yahoo pocketed by selling half its stake in Alibaba Group, one of China’s most successful internet companies. Yahoo earned $293 million, or 23 cents per share, at the same time last year.

If not for the Alibaba windfall and a restructuring charge, Yahoo said it would have earned 35 cents per share. On that basis, the company topped the average earnings estimate of 26 cents per share among analysts surveyed by FactSet.

Yahoo’s revenue for the quarter totalled $1.2 billion, a 1% decrease from last year. But that comparison is misleading because last year’s revenue included revenue that Yahoo no longer books because of an Internet search advertising partnership that diverts some of its ad sales to Microsoft Corp.

Wall Street focuses on net revenue – the amount of money Yahoo keeps after paying its commission to Microsoft and other sites that run its ads.

Net revenue in the latest quarter rose 2% to $1.09 billion – about $10 million more than analysts had predicted.

Although it wasn’t substantially above the analyst target, the net revenue figure came as a relief after years of letdown under the previous five full-time and interim CEOs that have run Yahoo since the company turned down an opportunity to sell itself to Microsoft for $33 per share in May 2008.

The meagre revenue growth illustrates the challenges facing Mayer as she tries to come up with a strategy that will persuade advertisers to rely more on Yahoo’s website instead of Google’s extensive marketing network and Facebook’s popular social networking service.

“We’re taking important steps to position Yahoo for long-term success, and we’re confident that our focus on quality and improving the user experience will drive increased value for our advertisers, partners and shareholders,” Mayer said in a statement.

Mayer, 37, is expected to elaborate on her plans during a Monday conference call with analysts.

Media Articles

TV industry watchdog says ‘pick and pay’ model would hurt economy, cost jobs

Friends of Canadian broadcasting says $2.9 billion and 30,000 jobs on the line

.quebec domain name coming soon

Pre-registration for new online designation starts Sept. 2

Social Scanner: Fanta tries comedy on Vine

Plus Yo pitches brands and Wendy's goes local with its social marketing

NBA extends agreement with BBTV

New deal includes global content management and optimization

Out-of-home spending up 5.5% in first six months of 2014

Digital leads the way as advertisers look to reach always-on consumers

Vubble provides video content you didn’t know you needed

The insight behind the anti-preference algorithm

Jones Media opens Montreal office

Former Rogers sales exec Marieve Lemay to handle Eastern Canada sales

Scenic Tours hits the (air) waves with Bell Media

Luxury tour/river cruise operator will be showcased in daily weather reports on Canada AM, CTV Morning Live