Yahoo has announced its third quarter results, beating market expectations with a modest rise in sales. The company's revenue for the quarter rose 1 percent to $1.09 billion (excluding commissions paid to partners for Web traffic), and it reported non-GAAP earnings of $0.52 per share.
Wall Street analysts were forecasting non-GAAP earnings of 30 cents per share on ex-TAC sales of $1.04 billion.
"We achieved this revenue growth through strong growth in our new areas of investment – mobile, social, native and video - despite industry headwinds in some of our large, legacy businesses”, said Marissa Mayer, CEO of Yahoo.
The Internet giant also revealed its mobile advertising revenue for the first time, reporting that mobile ads generated over $200 million in sales in Q3, which is effectively 17 percent of the company’s total revenue. Yahoo said its gross revenues in mobile will exceed $1.2 billion in revenue this year.
Display revenue stood at $447 million, a 5 percent decrease compared to $470 million for the third quarter of 2013, while search revenue was $452 million, up 4 percent compared to $435 million reported in the year-ago-quarter. Meanwhile, the number of ads sold increased around 24 percent compared to the third quarter of 2013, while price-per-ad decreased approximately 24 percent compared to the year-ago quarter.
GAAP net earnings for the quarter was $6.8 billion (which included a gain from sale of Alibaba Group shares of $6.3 billion), compared to $297 million in the third quarter of 2013. As of September 30, Yahoo had $12 billion in cash, up from $5 billion it had as of December 31, 2013.
According to research firm eMarketer, this year Yahoo will have 4.9 percent of the $50.7 billion market for online ads in the US, down from the 7.2 percent it had last year. This compares unfavorably to Facebook and Google, which are estimated to claim 9.7 and 38.3 percent market this year.