Yahoo beats Street, shares surge 11%
EmptyYahoo, which had been a serial disappointer on Wall Street for more than a year, reported third-quarter results Tuesday that bested analyst predictions and spurred the buying of shares after the markets closed.
The Internet search company that has been overshadowed by Google lately and has been through a management shake-up earned $151.3 million during the quarter.
While that's down from $158.5 million a year ago, it handily beat estimates, which had been reined in by Yahoo. Analysts expected Yahoo to earn 8 cents per share, but the company posted 11 cents.
Revenue rose 12% to $1.8 billion, while revenue excluding traffic acquisition costs, or the money Yahoo pays advertising partners, was up 14% to $1.3 billion, better than the $1.2 billion expected by analysts.
Yahoo stock, down 4.2% to $26.69 during the regular session, jumped as much as 11% in after-hours trading.
Jerry Yang, the co-founder who replaced Terry Semel as CEO four months ago, said the company has conducted a review of its business and has set three multiyear objectives: to become the starting point for Internet surfers; to be a must-buy for most advertisers; and to deliver open platforms that attract the most developers.
Yahoo president Susan Decker said the rollout of Panama, an ad platform designed to better compete with Google, is nearing completion. "Substantially, all our global advertisers have now been migrated to the new system," she said.
Also on Tuesday, Yahoo said that it struck a deal to power sponsored search across the WebMD network of consumer sites, and for WebMD to "be the only significant online health publisher to represent Yahoo's advertising inventory."
Yahoo also has struck advertising relationships with Cars.com, Forbes.com and Ziff-Davis Media, the company said Tuesday.