Yahoo Earnings Jump 46 Percent
Yahoo issued its second-quarter results after Tuesday’s opening bell, posting disappointing revenue totals in its two most important units, display and search advertising. The company’s profit rose by almost half, however, underscoring the progress CEO Marissa Mayer has made since coming over from Google last summer. Investors overlooked the revenue declines, choosing to focus on the positive aspects of the report, driving shares of the company up nearly 10 percent in early afternoon trading.
In the three months ended June 30th, Yahoo’s net income totaled $331 million, or 30 cents a share; an improvement of 46 percent over the same period in 2012. Overall revenue, however, slipped by 7 percent from the year ago quarter to $1.14 billion as the once-mighty tech firm continues to try and revive its ailing display and search advertising units. Yahoo’s revenue from display advertising was down 12 percent year-over-year in the second quarter, while revenue from search fell nearly 10 percent. In addition, the number of display ads Yahoo sold has declined for eight consecutive quarters now.
While Yahoo’s revenue hiccup underscores the difficult road ahead for Mayer in trying to revive the company’s core earnings businesses, the jump in profit is evidence of her successful management of Yahoo’s investment holdings. The company’s 24 percent stake in Alibaba has been a big driver of profits, and the stake is expected to continue delivering moving forward as the Chinese e-commerce firm is slated to go public next year. Mayer has warned investors that it will take time to turn around the ailing ad units, noting she is focusing on developing Yahoo’s staff before turning her attention to the company’s products. The efforts seem to be working, at least to the extent that employees aren’t leaving the firm at the same rapid pace they were before Mayer was brought in.