SUNNYVALE, Calif. - Yahoo (YHOO) can largely thank Chinese Internet users for its banner financial results in recent months.
The Internet company's third-quarter earnings soared as it collected a huge windfall on its investment in Alibaba, the Chinese e-commerce company that went public in September. Revenue also rose slightly from the previous year, a welcome change for a company that has been posting quarterly declines for most of the past five years.
The uptick included more than $200 million in revenue from mobile devices. That represented 17 percent of Yahoo's total revenue for the three months that ended in September, an indication that CEO Marissa Mayer's emphasis on designing sleeker applications for smartphones and tablets is starting to pay off. In a statement, she described the company's latest results as "good, solid third quarter."
Yahoo's stock climbed $1.12, or nearly 3 percent, to $41.30 in extended trading Tuesday.
The Sunnyvale, California, company earned $6.8 billion, or $6.70 per share, in the third quarter. That compares with income of $297 million, or 28 cents per share, last year.
Alibaba initial public stock offering last month accounted for most of that huge difference. Yahoo Inc. sold 140 million shares in the Chinese company's IPO last month, to bring in $9.5 billion before taxes. Yahoo still retains a 16 percent stake in Alibaba that is worth about $35 billion. If not for the Alibaba gain and certain other times, Yahoo said it would have earned 34 cents per share in the latest quarter. That figure topped the analyst estimate of 32 cents per share among analysts surveyed by FactSet.
Yahoo's third-quarter revenue totaled $1.15 billion, a 1 percent increase from last year. After subtracting ad commissions, Yahoo's revenue stood at $1.09 billion, about $50 million above analysts' projections.
The financial results could buy a little breathing room for Mayer, which has drawn fire from hedge fund and Yahoo shareholder Starboard Value.