Yahoo! Inc. (NASDAQ:YHOO) released its second quarter earnings report after closing bell tonight, posting non-GAAP earnings of 16 cents per share on $1.24 billion in revenue. In the second quarter past year, Yahoo reported a profit of $270 million.
Revenue, after deducting fees paid to partner websites, was flat at $1.04-billion.
Mayer said the company continues to invest, both in engineering and marketing talent and in the search partnerships – such as with Oracle’s Java and Mozilla’s Firefox – that help increase Yahoo’s market share.
While Mayer is trying to reshape Yahoo, the company has benefited from its stake of about 15 percent in Alibaba Group Holding Ltd., the largest e-commerce company in China.
In the company’s announcement, CEO Marissa Mayer called it the most substantial growth in revenue in almost nine years.
Reports began circulating in May that the Internal Revenue Service is considering spinoff-rule changes that could impact Yahoo’s plans. (Though, display revenue – minus traffic acquisition costs – actually rebounded to $406 million in the second quarter, up 3 percent from the year before.).
Analysts had been modeling $1.03 billion and 18 cents per share. The Sunnyvale, California, company predicted its net revenue will decline once again in the current quarter ending in September.
Despite the company’s first growth in display ad prices in four quarters, Yahoo’s shares fell 1.8% in after-hours trading to $39.
Yahoo has been struggling in recent years since losing its lead in Internet search to Google, and has been aiming for new niches under Mayer’s leadership. This year, Yahoo will claim 4.6% of the $27 billion market for online ads in the US, down from a 5.5% share last year, estimates eMarketer Inc.
Up to Tuesday’s close, Yahoo shares had dropped 21.3 percent this year.
“Yahoo’s transformation is well underway and overall I am very pleased with our progress”, Mayer said. She said search remains a key area for Yahoo and that mobile search “is fertile ground for innovation”.