Yahoo Beats Wall Street with EPS of 32 Cents in Fourth Quarter

Andrew Klips |

Yahoo! Inc. (YHOO) released fourth quarter and full year earnings after Monday’s closing bell that beat Wall Street estimates, giving shares a lift in after hours trading.

Sunnyvale, California-based Yahoo reported GAAP revenue of $1.35 billion for the fourth quarter and adjusted earnings of $272.3 million, or 32 cents per share, compared to net income of $295.6 million, or 24 cents per share, in the year prior quarter.  Analysts were expecting revenue of $1.21 billion and earnings per share of 27 cents.

Excluding traffic acquisition costs, the portion of sales that Yahoo shares with partners, revenue totaled $1.22 billion in the fourth quarter, up 4 percent from $1.17 billion in the year prior quarter.

The figures aren't exactly mind-blowing, but they do lend some credence to the “Marissa Mayer effect” starting to come through as the company planned when they named her Chief Executive Officer last July.  Mayer was the fifth CEO in four years for the embattled company looking for a chief to breathe some life back into it.

For the complete year, Yahoo recorded GAAP net earnings included a net gain of $2.76 billion related to the sale of Alibaba shares.  Non-GAAP net earnings for the full year of 2012 was $1.41 billion, a 35 percent increase from the prior year.

Adjusted EBITDA for the fourth quarter of 2012 was $509 million, an 8 percent increase from the same period of 2011. Adjusted EBITDA was $1.7 billion for the full year of 2012, a 3 percent increase from the prior year.

"I'm proud of Yahoo!'s 2012 and fourth quarter results. In 2012, Yahoo! exhibited revenue growth for the first time in 4 years, with revenue up 2 percent year-over-year," said Mayer in a corporate statement.

Yahoo’s two primary sources for advertising revenue, search engine usage and banner-type ads, provided mixed results in the fourth quarter.  Search engine revenue rose 14 percent to $427 million, but sales from display ads declined 3 percent from the year prior to $591 million in Q4 2012.

Investors have turned a favorable eye on Yahoo since Mayer, a former exec at Google, took the helm last year.  Shares have risen about 35 percent in her time as chief executive, including hitting their highest level since September of 2008 in the past two days.

That being said, analysts are still going to want to see continued improvement and hear concise plans as to how Yahoo intends to grow.  Wall Street didn’t seem to expect a lot this past quarter, but that trend probably won’t continue.

Shares perked as much as 4 percent in after hours trading after closing the session down 0.29 percent at $20.31.

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Companies

Symbol Name Price Change % Volume
CHKE Cherokee Inc. 10.85 0.30 2.84 120,401
YHOO Yahoo! Inc. 40.07 0.44 1.11 8,588,544

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