Yahoo Earnings Beat Forecasts

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SAN FRANCISCO -- Yahoo reported earnings Monday that were considerably above Wall Street expectations.

Yahoo reported net income in the fourth quarter of $272 million, or 23 cents a share, compared to $295.6 million, or 24 cents a share, in the year-ago quarter.

But using a non-standard accounting method favored by Wall Street analysts, the net income was 32 cents a share. Analysts had expected 28 cents a share, according to a survey by Thomson Reuters.

The company said revenue was up 1.5 percent from the same quarter a year ago at $1.35 billion.

"I'm proud of Yahoo's 2012 and fourth-quarter results," Yahoo's chief executive, Marissa Mayer, said in a company press release. "In 2012, Yahoo exhibited revenue growth for the first time in four years, with revenue up 2 percent year-over-year."

Yahoo's fourth-quarter earnings arrived at a critical juncture for Ms. Mayer, who joined the company six months ago.

Since then, her sheer presence at Yahoo headquarters seems to have jolted the company's stock back to life. Yahoo's stock is up more than 10 percent since July, and closed at its highest price since September 2008 on Thursday at $20.52.

Yahoo's stock jumped more than 4 percent Monday in after-hours trading after closing at $20.31 in regular trading.

With Ms. Mayer's honeymoon coming to an end, investors are eager to see whether she can deliver revenue growth.

Yahoo's revenue has largely languished in an increasingly competitive landscape, in which it now finds itself vying with Facebook and Google for engineers, and for greater share of the online display advertising market.

The company's search business, which Yahoo outsourced to Microsoft in 2009, is on its last legs, propped up only because of a revenue-guarantee clause in its contract with Microsoft that is set to expire in two months, though search revenue rose 4 percent in the fourth quarter to $482 million compared to $465 million for the year-ago quarter.

But as Ms. Mayer has acknowledged, Yahoo's future growth may well depend on its mobile strategy. Without its own mobile hardware, browser or social platform of its own, Yahoo has a long way to go.

In the past, Ms. Mayer has said the company's mobile growth may come from smaller-scale acquisitions of mobile app companies. Yahoo acquired Stamped, a mobile app, for an undisclosed sum last October. In December, Yahoo acquired OnTheAir, a small video-conferencing start-up, whose five-member team will focus on mobile products. Last week, it made its third acquisition with Snip.it, a San Francisco start-up. Like Stamped and OnTheAir, the service was immediately shut down. The team said it would be working in the "social news" area.

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This article originally appeared in The New York Times.


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