Yahoo Beats on Earnings; Revenue Is Light

Yahoo reported quarterly earnings thatbeat analysts' expectations, though revenue was light.

Shares rose in after-hours trading on Tuesday. Click here to see the latest quote.

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The earnings announcement comes less than twenty-four hours after Yahoo named Marissa Mayer, former Google executive,its new CEO.

On day one, Mayer is not leading Tuesday's earnings conference call, but as chief will soon be held responsible for balance sheet performance.

The Internet company delivered second-quarter earnings excluding items of 27 cents per share, up from 18 cents a share in the year-earlier period.

Net revenue, which excludes fees paid to partner websites, came in at $1.08 billion, compared to $1.076 billion at this time last year. Net income was also flat at $190 million compared to $191 million in the same period last year.

Analysts had expected the company to report earnings excluding items of 23 cents per share on revenue of $1.1 billion, according to Thomson Reuters.

Yahoo said its revenue from online-display ads increased 2 percent year-on-year to $535 million, while its search revenue decreased 1 percent to $461 million. The company also reported repurchasing 30 million shares for $456 million during the second quarter.

Yahoo did not provide forward-looking guidance on Tuesday, in order "to give Mayer time to get her footing," said chief financial officer Tim Morse, during the post-earnings conference call. Morse did, however, say that Yahoo's U.S. business is "doing better."

Morse also announced another juggernaut: China's Alibaba group, an e-commerce company with which Yahoo has had fractious negotations, will close transactions with Yahoo "well within" the originally planned 6-month time frame. Yahoo sold a large stake in Alibaba earlier this year, which is expected to bring in about $7 billion.

Still, investors are now wondering whether earnings performance can improve on Mayer's watch.

Mayer's plans remain ambiguous, though she did tell the Financial Times on Mondaythat she will include "innovating in some of the verticals like finance, sports, video and messenger," while also "being relevant to consumers in their everyday lives — email, search, the homepage and now mobile."

Consensus on the Street says Mayer has a very limited windowof time in which to prove herself. Yahoo has ushered in — and booted out — five CEOs in the last five years, and skepticism for the new chief executive is fairly high.

Analysts say, for starters, Yahoo's problems include a stagnant stock price, leadership challenges and an identity crisis.

Mayer's first months at Yahoo will also include the birth of her first child — a fact of which Yahoo's board is fully aware.

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