Yahoo! Posts Solid Quarter Amid Uncertainty

NEW YORK ( TheStreet) -- Yahoo! ( YHOO) turned in solid quarterly performance in Thursday, despite the turmoil in its C-suite and swirling speculation about whether the company should continue to go it alone or put itself on the auction block.

The company reported fiscal third-quarter earnings of $293 million, or 23 cents a share, with revenue excluding traffic acquisition costs, or TAC, coming in at $1.07 billion. On an adjusted basis, excluding one-time items, Yahoo! earned 21 cents a share in the latest quarter.

The profit performance was above expectations and revenue was in-line as the average estimate of analysts polled by Thomson Reuters was for a profit of 17 cents a share in the three months ended Sept. 30 on revenue of $1.07 billion.

"We're pleased that revenue, operating income and EPS were all above consensus this quarter," said Tim Morse, the company's interim CEO and chief financial officer. "My focus, and that of the whole company, is to move the business forward with new technology, partnerships, products, and premium personalized content -- all with an eye toward growing monetization."

For its fiscal fourth quarter ending in December, Yahoo! forecast revenue excluding TAC ranging from $1.125 billion to $1.235 billion. That view surrounds the current consensus estimate for revenue of $1.216 billion.

Based on Tuesday's regular session close at $15.47, the stock is down about 5% so far in 2011 but the performance would be much worse if not for the takeover speculation swirling around the company since CEO Carol Bartz was ousted in early September.

After hitting a 52-week high of $18.84 on May 9, the shares trended lower for most of the summer, driven by the embarrassing confusion over ownership of Alipay and soft ad display revenue in the second quarter following a change in its sales organization. The stock scraped a 52-week low of $11.09 on Aug. 8, and a month later, Bartz was out.

The initial reaction to the results was positive as Yahoo! shares were advancing nearly 3% in after-hours action.

Most of Wall Street has adopted a wait-and-see attitude toward Yahoo! ahead of the report with 17 of the 29 analysts covering the stock at hold vs. 12 at strong buy (5) or buy (7).

-- Written by Michael Baron in New York.

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