Yahoo CEO Marissa Mayer may have quelled at least some investor anxiety Tuesday as the company beat expectations with earnings of 52 cents per share on $1.09 billion in revenue in the third quarter.
The revenue was up 1 percent for the quarter ending Sept. 30. Analysts had expected 30 cents per share earnings on $1.05 billion in revenue. The company had forecast revenue of $1.02 billion to $1.06 billion. The stock immediately jumped 4 percent in after-hours trading.
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“We had a good, solid third quarter,” Mayer said. “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.”
The biggest concern for investors remained what will happen now that Yahoo has sold much of its stake in Chinese e-commerce company Alibaba after its IPO. While Yahoo brought in more than $9 billion by selling Alibaba stock, the profit could be fully taxed which would cause the company to lose billions in value.
Last month, Starboard Value hedge fund CEO Jeffrey Smith took Mayer to task over creating more value by stopping acquisitions, lowering costs and looking to monetize Asian assets without being punished by taxes. Smith also encouraged consideration of a merger with AOL.
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Yahoo spent nearly $1 billion on Tumblr in 2013 and $300 million for analytics service Flurry Inc. earlier this year. Wall Street hasn’t been impressed with the results, seeing little upside the to acquisitions.
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Mayer has already shed jobs, saying that the company will cut nearly 3 percent of global staff. Yahoo’s office in Amman, Jordan has already closed, which eliminated about 80 jobs. The company is also cutting 400 positions at the company’s office in Bangalore, India.