Yahoo! Inc. Earnings: Investors Bid Stock Up on Heels of Good News

S&P 500 (NYSE:SPY) component Yahoo! Inc. (NASDAQ:YHOO) reported net income above Wall Street’s expectations for the third quarter. Yahoo is a digital media company that delivers personalized digital content and experiences across devices worldwide.

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Yahoo! Inc. Earnings Cheat Sheet

Results: Net income for Yahoo! Inc. rose to $3.16 billion ($2.64 per share) vs. $293.3 million (23 cents per share) in the same quarter a year earlier. This marks a substantial increase from the year-earlier quarter.

Revenue: Fell 1.2% to $1.2 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Yahoo! Inc. beat the mean analyst estimate of 25 cents per share. It beat the average revenue estimate of $1.1 billion.

Quoting Management: “Yahoo! had a solid third quarter, and we are encouraged by the stabilization in search and display revenue,” said Marissa Mayer, CEO of Yahoo!. “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.”

Key Stats: The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 7 cents in the second quarter, by 7 cents in the first quarter, and by one cent in the fourth quarter of the last fiscal year.

Net income has increased more than twofold year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 977.8% from the year-earlier quarter.

Revenue has dropped in the past two quarters. In the second quarter, revenue declined 0.9% to $1.22 billion from the year-earlier quarter.
Looking Forward: Analysts are pessimistic about the company’s results for the next quarter. The average estimate has fallen for the fourth quarter to 27 cents per share, down from 28 cents seven days ago. For the fiscal year, the average estimate has moved down from 96 cents a share to 93 cents over the last seven days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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