Yahoo! Q3 profit boosted by Alibaba gains

Nieuws Breedband Wereld 22 OCT 2014
Yahoo! Q3 profit boosted by Alibaba gains
Yahoo! reported third-quarter sales up 1 percent to USD 1.148 billion. Excluding traffic acquisition costs, revenue also rose 1 percent, to USD 1.094 billion. The internet company posted a 5 percent fall in display ad revenues to USD 477 million, while search revenues increased 4 percent from a year ago to USD 452 million. CEO Marissa Mayer said the growth came in part due to investments in mobile services, which contributed over USD 200 million in revenue in the quarter. She said the company was on track to generate USD 1.2 billion in gross revenue from mobile this year. 

Yahoo's operating profit was still down 55 percent year-on-year to USD 42 million, and adjusted EBITDA fell 8 percent to USD 306 million. Net profit jumped to USD 6.8 billion or USD 6.70 per share, thanks to a one-time gain of USD 6.3 billion from selling shares in Alibaba's IPO. This helped the company finished the quarter with USD 12 billion cash, up from USD 5 billion at the start of the year. 

Yahoo said it will pay USD 3.3 billion in tax in Q1 2015 on the profit from the sale of Alibaba shares. It also spent USD 1.1 billion in October to buy back 15 million of its shares from a financial institution. This is part of its commitment to return half the proceeds of the Alibaba sale to shareholders. 

For the fourth quarter, Yahoo forecast revenues of USD 1.20-1.24 billion, adjusted EBITDA of USD 340-380 million and adjusted operating profit of USD 190-230 million. 

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