Yahoo Earnings, Revenue Beat Wall Street's Expectations
Yahoo reported quarterly earnings and revenue that beat analysts' expectations on Monday in the Internet giant's first earnings report with new Chief Executive Marissa Mayer at the helm.
After the earnings announcement, Yahoo shares ose in trading after the closing bell. (Click here to get the latest quotes for Yahoo.)
"Yahoo had a solid third quarter, and we are encouraged by the stabilization in search and display revenue," Mayer said in the earnings release. "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."
Excluding a $2.8 billion gain related to the sale of Alibaba Group shares, Yahoo said it earned $177 million, or 35 cents per share, up from $175 million, or 21 cents in the year-earlier period.
Revenue, which excludes fees paid to partner websites, increased 2 percent to $1.09 billion from $1.07 billion a year ago.
Revenue from searches rose 11 percent to $414 million during the quarter.
"It still lags behind market leader Google," said David Garrity of GVA Research about Yahoo's search revenue in a CNBC interview. "The company hasn't necessarily turned things around and regained market share."
Analysts had expected the company to report earnings excluding items of 25 cents a share on $1.08 billion in revenue, according to a consensus estimate from Thomson Reuters.
During the company's earnings call, Yahoo did not provide earnings or revenue guidance.
This was the first quarterly report delivered by Mayer, a former Google executive.
As part of her comeback plan for Yahoo, Mayer has poached a string of tech executives to help her lead the company in recent weeks.
These additions include Henrique de Castro as chief operating officer, Ken Goldman as chief financial officer, Ron Bell as general counsel, Jacqueline Reses as executive vice president of people and development, and Kathy Savitt as chief marketing officer.
Roughly 700 million users visit a Yahoo website every month — putting it in the top ranks globally. But the amount of activity people engage in on many sites is steadily declining and its smartphone offerings are deemed lackluster.
Before the earnings release, Ann Winblad, co-founder and managing director of Hummer Winblad Venture Partners, stressed the importance of monetizing mobile for tech companies.
"This is a big experiment in the tech industry," Winblad said. "Everyone is a 2.0 company now whether they want to be or not. Google , Microsoft, even Amazon is going to have to deal with mobile sooner versus later."
On the company's earnings call, Mayer told investors that mobile is the company's top priority In the near future, she said Yahoo will have to become a predominately mobile company.
Mayer is expected to focus on revamping Yahoo's technology and products, shifting course from the media-centric approach embraced by her immediate predecessor Ross Levinsohn.
Yahoo ended the quarter with 12,000 employees, down more than 12 percent from 13,700 a year earlier.