Source: courtesy of Yahoo!
The Internet portal company reported quarterly adjusted diluted earnings per share (EPS) of $0.46 on revenue of $1.18 billion. In the same period a year ago, Yahoo reported EPS of $0.46 on revenue of $1.2 billion. Fourth-quarter results compare to the consensus estimates for EPS of $0.29 on revenue of $1.19 billion. Revenues are calculated excluding traffic acquisition costs (ex-TAC).
For the full year Yahoo posted EPS of $1.57 on revenues, ex-TAC, of $4.4 billion compared with 2013 EPS of $1.52 on revenues of $4.43 billion. Analysts were looking for EPS of $1.59 on revenues of $4.41 billion.
Display revenues ex-TAC, Yahoo’s bread and butter, slipped 5% from $491 million in the year-ago quarter to $464 million. The company sold 17% more ads, but the price per ad fell by approximately 20% compared with the fourth quarter of 2013.
Yahoo CEO Marissa Mayer said:
Our mobile strategy and focus has transformed Yahoo and yielded significant results. In Q4, we saw $254 million in mobile revenue, up 23% quarter-over-quarter. Across all of 2014, we saw gross mobile revenue of $1.26 billion and GAAP mobile revenue of $768 million. Our investment businesses – mobile, video, native, and social – collectively delivered more than $1.1 billion in GAAP revenue, up 95% year-over-year. These growth drivers have really focused our investments and energy on the future of digital advertising.
Search revenue was flat on an ex-TAC basis year-over-year and rose 3% for the full year compared with 2013. Paid clicks rose 10% compared with the fourth quarter of 2013; and price-per-click was up about 7%.
The announced spin-off of the company’s Alibaba holdings is the news of the moment. Yahoo will form a new company in which the stock will be distributed tax free “pro rata to Yahoo shareholders.” The new company will hold all of Yahoo’s remaining 384 million shares of Alibaba, valued at $40 billion based on the closing price on January 26, 2015, as well as a legacy, ancillary Yahoo business. The transaction is expected to close in the fourth quarter of 2015 at the expiration of Yahoo’s lockup agreement following Alibaba’s IPO.
Yahoo will continue to operate the core business and maintain its 35.5% stake in Yahoo! Japan.
Shares traded up 6.25% in after-hours trading Tuesday, at $51.48 in a 52-week range of $32.15 to $52.62. Shares closed the regular trading session down about 2.9% at $47.99. Thomson Reuters had a consensus analyst price target of around $51.40 before today’s results were announced.
ALSO READ: The Easiest (and Hardest) Jobs to Keep
Sponsored: Want to Retire Early? Start Here
Want retirement to come a few years earlier than you’d planned? Orare you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
