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Yahoo shows greater-than-expected profit in quarterly report

updated 06:46 pm EDT, Mon October 22, 2012

Cost-cutting, sale of Alibaba cited in improved numbers

Yahoo's quarterly earnings have come in higher than anticipated, beating Wall Street predictions. Third quarter earnings were 35 cents a share with $1.09 billion in sales. Analysts had expected 26 cents per share on revenue of $1.08 billion. The improved per-share profit on relatively flat sales is attributed to reorganization and cost-cutting as a result of Marissa Mayer's changes upon taking the helm of the company.

Revenue for display advertising was essentially unchanged at $451.6 million in the quarter, while search revenue increased 11 percent to $414.1 million. Unlike past quarterly earnings reports, Yahoo didn't provide a future outlook likely due to Google's influence on Mayer -- Google doesn't provide earnings forecasts either.

Herman Leung, an analyst at Susquehanna International Group said that the US "seems to be an area of strength, and Yahoo is bigger in the US" than its competitors. Susquehanna holds a neutral rating on Yahoo stock.

Two key overseas cost-cutting measures include the sale of half of Chinese partnership Alibaba, and last week's announcement that it is extricating itself from its South Korea location and business.

by MacNN Staff



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