Net revenue, excluding traffic acquisition costs, or TAC, came in at $1.08 billion during the third quarter. That was down 1% from a year earlier when Yahoo generated $1.09 billion in net revenue.
Earnings came in at 34 cents a share, compared to 39 cents a share a year earlier, the company also said.
Yahoo was expected to make 33 cents a share on revenue of $1.08 billion in the period, according to Thomson Reuters data.
Marissa Mayer has righted the ship since joining Yahoo about 15 months ago — spurring a major recovery in its shares, which have more than doubled in the period.
On Tuesday, Mayer highlighted that the number of Yahoo monthly users has climbed 20 percent to over 800 million since she took over. However, that has yet to translate into higher revenue growth.
"She is focusing on getting the products in order and monetization will hopefully follow," said Sameet Sinha, an analyst at B. Riley & Co.
Yahoo shares fell 0.6% to $33.14 in after-hours trading Tuesday, following the results.
Yahoo forecast fourth-quarter revenue of $1.18 billion to $1.22 billion, excluding TAC, and adjusted earnings, before interest, tax, depreciation and amortization, of $400 million to $420 million. Wall Street was looking for revenue of $1.25 billion and earnings of $487 million, according to RBC Capital Markets.
"Guidance was a little below consensus, which is likely Yahoo being conservative," Sinha said.
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Revenue from display ads fell 7% to $470 million in the third quarter and the price per ad also fell 7% compared to a year earlier.
However, the price decline was a lot less severe than during the second! quarter, Sinha noted.
"That is a very positive early sign" that Mayer's efforts may be beginning to pay off, the analyst added.
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