Yahoo’s stock fell 73 cents, or almost 2 percent, to $39 in extended trading after the numbers came out.
Advertisement
The company reported adjusted income of $262 million for the quarter that ended June 30, on slightly more than $1.24 billion in revenue, or $1.04 billion after subtracting the payments to ad partners that help drive user traffic.
At .24bn, Yahoo’s sales smashed analysts’ expectations. Coupled with light guidance, those losses brought Yahoo’s stock down 2.21%. (Though, display revenue – minus traffic acquisition costs – actually rebounded to $406 million in the second quarter, up 3 percent from the year before.).
Without the Alibaba stock in its investment portfolio, Yahoo will probably have to start boosting its revenue or Mayer may face more shareholder unrest.
Despite that funk, Yahoo’s stock has more than doubled under Mayer’s leadership, though the gain has had little to do with her strategy.
Earnings are squeezed, however, with the company reporting earnings per share of $0.16, against expectations of $0.18. Analysts at Pivotal Research reiterated a “hold” rating and set a $42.00 price target (down previously from $49.00) on shares of Yahoo! in a research note on Monday, July 13th.
That’s 15% year-over-year ex-TAC revenue growth, which is greater than Yahoo’s seen in nearly nine years.
Meanwhile, Yahoo’s mobile, video, native, and social business earned $399 million this quarter, up 10 percent from last quarter.
Advertisement
The Internet company said last week that it intends to spin off its $32 billion of Alibaba shares into a separate company, and CEO Marissa Mayer could be asked about the allegedly tax-free plan when she speaks to analysts later Tuesday. Yahoo has about $7 billion in cash. In recent news, Yahoo has filed for the spin-off of its stake in Alibaba that represents 15% of Alibaba Group, and other small operations into a new business entity called Abaco Holdings.
