This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Yahoo! Rises on Earnings Beat, Reduced Alibaba Sale

NEW YORK ( TheStreet) -- Yahoo! (YHOO - Get Report) shares rose 0.9% to $33.69 after the Internet giant posted results that beat Wall Street expectations.

For the third-quarter, Sunnyvale, Calif.-based Yahoo! reported earnings of 34 cents a share on $1.081 billion in revenue, as search revenue excluding traffic acquisition costs (TAC) rose 3% year-over-year to $426 million.

Analysts surveyed by Thomson Reuters expected Yahoo! to earn 33 cents a share on $1.08 billion in revenue for the third quarter.

Yahoo! will hold an earnings livestream at 5 p.m. EST to discuss the results.

"I'm very pleased with our execution, especially as we've continued to invest in and strengthen our core business," said Yahoo! CEO Marissa Mayer. "In Q3, we launched new user experiences across many of our digital daily habits -- Yahoo Screen, My Yahoo, Fantasy Sports, and more. Now with more than 800 million monthly users on Yahoo -- up 20 percent over the past 15 months -- we're achieving meaningful increases in user engagement and traffic."

Display revenue ex-TAC fell 7% year over year to $421 million, despite the number of ads being sold (excluding Korea) increasing 1% over the same time frame. The company said the price-per-ad, a key advertising metric, fell 7% year over year.

In addition to the earnings, Yahoo! announced it had entered into an amended agreement with Alibaba, of which it owns 24%. It will now sell 208 million shares during the upcoming Alibaba IPO, down from 261.5 million.

During the quarter, Alibaba and Yahoo! Japan, of which Yahoo! owns 35%, contributed $233 million in earnings to Yahoo!

Yahoo! ended the quarter with $3.2 billion in cash and cash equivalents, down from $6 billion at the end of 2012. The company used $1.685 billion during the quarter for buybacks, purchasing 59 million shares. It also used $163 million during the quarter for acquisitions.

"In Q3, we generated free cash flow of $249 million and returned an additional $1.7 billion to shareholders through buybacks," said Ken Goldman, Yahoo!'s CFO. "As we exit Q3, we are extremely pleased with the strength of our balance sheet, with nearly $3.2 billion in cash and securities, and we are well positioned with ample liquidity to fund our future investments for growth."

For the fourth quarter, Yahoo! expects revenue to between $1.18 billion and $1.22 billion, with non-GAAP operating income expected to be between $240 million and $260 million.

Analysts surveyed by Thomson Reuters expect revenue excluding TAC to be $1.25 billion.

Shares of Yahoo! closed lower in Tuesday trading, off 1.8% to finish at $33.38.

-- Written by Chris Ciaccia in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
YHOO $36.60 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs