Yahoo Reports Mixed Q4 With Mobile Revenue Of $254M, Total Top Line Of $1.18B

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Yahoo Plans To Spin Off Its Alibaba Stake, Tax Free, Into A New Company

Today Yahoo reported its fourth-quarter financial performance, including revenue excluding the cost of acquiring traffic of $1.179 billion, and non-GAAP earnings per share of $0.30. The market had expected the company to report $1.19 billion in revenue, and non-GAAP earnings of $0.29 per share.

Yahoo also announced that it plans to spin its remaining stake in Alibaba out into a new company. The plan has large tax advantages, and investors like a good savings.

The company reported that its mobile work generated $254 million in revenue during the quarter. That is up from $200 million in the sequentially preceding period. Yahoo’s aggregate “Transformative Group,” that mobile is part of, along with social, video and other products, generated $380 million during the quarter.

In a note to investors, Yahoo CEO Marissa Mayer stated that the quarter’s results show “stability in [Yahoo’s] core business.”

Following its mixed results, the company is up nearly 10 percent in after-hours trading. The company fell 3 points in regular trading, exceeding a down market. The Alibaba news is quite popular, it seems.

Yahoo beat the street in three of the four quarters in 2014. Yahoo’s revenue for the period was down $21 million from the year-ago period. The company’s adjusted EBITDA fell from $478 million in the year-ago period, to $409 million in the most recent quarter.

The company reported full-year revenue, excluding traffic acquisition costs of $4.618 billion and full-year adjusted EBITDA of $1.362 billion. The company ended 2014 with cash on hand of $10 billion, up sharply in the second half of the year due to the massive Alibaba initial public offering. What Mayer should do with the massive cash hoard is a cause of contention between the company and some investors.

The company’s display revenue totaled $532 million in the quarter, while its search revenue came to $467 million. Display revenue was down 4 percent, while search revenue rose by a single percent. Search has been a key revenue source for the company, its deal with Microsoft’s Bing technology has been a growing driver of the company’s top line.

Yahoo failed to grow, again, but investors seem content with its equity plan for its Alibaba assets, which could dampen some investor discontent with Mayer’s tenure as CEO.