Before we begin, I'd like to remind you that today's call may contain forward-looking statements concerning matters such as our expected financial and operational performance, our long-term financial objectives and the company's strategic review process, as well as our expectations for the economy, in general, and online advertising, in particular. The financial and operational impact of our Search Alliance with Microsoft and our strategic operational and product plans. Actual results may differ materially from the results predicted in our statements, and reported results should not be considered indicative of future performance.Potential risks and uncertainties that could cause our business and financial results to differ materially from our forward-looking statements are described in our Form 10-Q filed with the SEC August 8, 2011, as well as in the earnings release included as Exhibit 99.1 to the Form 8-K we furnished today to the SEC. All information discussed on this call is as of today, October 18, 2011, and Yahoo! does not intend and undertakes no duty to update this information to reflect subsequent events or circumstances. On today's call, we'll discuss some non-GAAP financial measures as we talk about the company's performance. These may include total expenses less traffic acquisition costs, or TAC, revenue excluding TAC or revenue ex-TAC, and operating margin ex-TAC. Reconciliations of those non-GAAP financial measures to the GAAP measures we consider most comparable can be found on our corporate website, info.yahoo.com, under Investor Relations. We have prepared remarks that will last about 15 minutes, then we'll have a brief Q&A session. And with that, I'd like to turn the call over to Tim. Timothy R. Morse Thanks, Marta. Good afternoon, and thanks for joining our discussion of third quarter 2011 financial results. We are pleased that revenue, operating income and EPS were all above consensus estimates this quarter and look forward to discussing the details of our performance with you. In addition to these financial results, the key operating take away, our underscore is that we remain focused on executing against our key strategies to build best-in-class technology, deepen the quality and personalization of our content, and grow monetization. Before I get into the details of our results, let me reiterate what the Board has said about its comprehensive strategic review process. The board is actively looking at the full range of options available to return the company to a path of robust growth and industry-leading innovation. The objective is to deliver on our company's potential and to create value for our employees, advertisers, users and our shareholders. The Board also has said that when it has something to announce, it will do so. That will take time. It will not be today and not on this call. For the rest of my comments, we'll focus on third quarter results and fourth quarter guidance.
Let's begin with an overview of third quarter. On the top line, our 3Q ex-TAC revenue of $1,072,000,000 was fractionally below the midpoint of our guidance range. Our operating income of $177 million was above the high end of our range and ex-TAC operating margins were higher than we expected and roughly flat with last year's third quarter at 17%. Earnings per share were $0.23. Adjusted EPS were $0.21, which is up 32% versus 3Q a year ago. This excludes a $25 million onetime gain in 3Q '11 related to our ownership in Alibaba Group, and also a $186 million gain on the sale of HotJobs from the prior year. We are also very pleased to have repurchased 44 million shares for $593 million during the quarter.Diving into revenue in more detail, worldwide ex-TAC Display revenue was flat year-over-year at $449 million, below our expectations for modest growth. Premium Display revenue grew versus prior year, helped by Page View growth of 9% on our media properties. By contrast, nonpremium Display revenue declined due to lower impressions in yield. As in 2Q, Display revenue in EMEA and APAC performed well, growing nearly 30% versus 2010. In Americas, we're seeing some positive momentum and some headwinds. On the plus side, our media properties are seeing growth in sell-through rates, solid impressions and revenue for premium or guaranteed placements. However, declines in nonguaranteed placements across Mail and other high-reach sites contributed to an overall Display revenue decline in the Americas region. Read the rest of this transcript for free on seekingalpha.com