Yahoo beats in Q3 with revenue of $1.09B, $0.52 EPS on growing mobile income

Yahoo today reported its third-quarter earnings for 2014, with revenue of $1.09 and non-GAAP earnings per share (EPS) of $0.52. Analysts had expected earnings of $0.30 on revenue of $1.04 billion.

In its 2013 third quarter, the company reported revenue of $1.08 billion. But since then, the company had declined in revenue for the last four quarters.

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“We achieved this revenue growth through strong growth in our new areas of investment – mobile, social, native and video – despite industry headwinds in some of our large, legacy businesses,” said chief executive Marissa Mayer in the third quarter earnings press release. She also noted GAAP mobile revenues in excess of $200 million. This is the first time Yahoo has broken mobile revenues out in its earnings report.

Yahoo’s third quarter results arrive as the company faces increasing pressure to do something to ramp up revenues. Mayer is expected to unveil yet another plan to turn around Yahoo, during this afternoon’s earnings call.

Yahoo has been on a bit of a buying spree this quarter. In July the company picked up mobile ad analytics startup Flurry, then in August it picked up location recommendation app Zofari and fraudulent ad finder ClarityRay. In September the media company bought photo ad network, Luminate and shut it down.

The trend here is towards buying startups that will strengthen the company’s overall digital advertising business. But it’s a very competitive field out there. Google more or less owns the digital advertising space where it commands roughly 31 percent of the market share, according to eMarketer estimates. Comparatively, Yahoo is expected to lose market share, from 2.9 percent to 2.4 this year.

And that may be so, at least where display ads are concerned. GAAP revenues for display ads were down 5 percent year over year.

Yahoo also netted $7 billion dollars this quarter when it sold 27 percent of its Alibaba stock during the Chinese company’s IPO. Half of that money will be returned to investors in the form of dividends, but the rest could be used for key acquisitions.

Either way, investors are looking for answers. A significant investor in Yahoo, Starboard Value issued an open letter to Marissa Mayer in September urging her to consider merging with AOL.

In normal trading, Yahoo was up 2.29 percent. In after hours trading, Yahoo shares jumped up 4 percent.

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