This afternoon Yahoo! reported Q4 revenue was slightly light of expectations, and beat by a penny on the bottom line, Barron's reports. The report said the company would spin-off its interest in Alibaba Group Holding (BABA) as a separate public company.
Revenue in the last three months of 2014 grew to $1.18 billion, yielding EPS of 30 cents. Market participants had been modeling $1.19 billion and 29 cents per share.
Separately, CEO Marissa Mayer said the company will
spin-off the $40 billion worth of holdings in Alibaba Group Holding as a
separate, publicly listed company:
“Today, along with our Board of
Directors, I am proud and happy to announce a plan for a tax-free
spin-off of our Alibaba holdings. Throughout my tenure with the company,
we have worked tirelessly on a tax-efficient alternative that would
maximize the value of our Alibaba investment for our shareholders. A
tax-free spin off accomplishes this and delivers value directly and
exclusively to our shareholders,” said Marissa Mayer.
“Through share repurchases to date, we have returned approximately $9.7 billion of proceeds from Alibaba. Post-spin, using the closing price for Alibaba as of January 26, we will have returned nearly $50 billion dollars of value to our shareholders. This level of capital return is historic, especially for a company of our size. The plan announced today vividly demonstrates our commitment to being good stewards of capital and increasing shareholder value.”
Yahoo! stock is up $3.61, or 7.4%, at $51.60, in late trading.
After backing out “traffic acquisition cost,” or TAC, search advertising revenue was flat with the prior-year results at $462 million in the firm's main search and display business. On a gross basis, search revenue rose 14%, year over year, to $932 million.
Revenue from display advertising, after TAC, was down 5%, at $464 million, as volume of display ads rose 17% while prices, on average, declined 20%.
