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Yahoo reported a profit that was higher than last year and which streaked past expectations, sending its shares higher in extended trading Tuesday.
The earnings improvement reported Tuesday was primarily driven by extensive cost cutting that has eliminated more than 2,000 jobs during the past year.
The Web portal and online search company said it earned 13 cents a share in the third quarter, up from 9 cents a share in the same period last year.
Sales for the quarter came in at $1.13 billion—excluding traffic-acquisition costs—compared with $1.325 billion this time last year.
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Paul Sakuma / AP Yahoo's headquarters in California. |
Yahoo said revenue in the fourth quarter would range from $1.6 billion to $1.7 billion. The company did not say what its traffic acquisition costs would be next quarter. Wall Street was expecting fourth-quarter revenue of $1.22 billion, excluding traffic acquisition costs.
"You have to view Yahoo's cup as being half full rather than being half empty," said Gartner Analyst Allen Weiner. "They seem positioned for a turn-around with the deal with Microsoft and with branding. They are pretty well-positioned to make a comeback in Q4. These numbers are not going to hurt them."
Shares of the company hopped more than 5 percent in late trading. Get after-hours quotes for Yahoo here.
The stock finished the regular Nasdaq session [YHOO
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Yahoo's stock is up about 20 percent since early August, regaining the ground it lost following the company's announcement of a 10-year deal to outsource its search technology to Microsoft [MSFT
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Antitrust regulators in the United States and Europe are evaluating a 10-year Web search partnership between Yahoo and Microsoft, which are joining forces to challenge market leader Google [GOOG
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By combining their search engines, Yahoo and Microsoft would hold roughly 30 percent of the U.S. search market, compared with Google's 65 percent according to comScore, making their combined audience a more attractive place for marketers to spend their ad dollars.
- AP and Reuters contributed to this report.
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