Yahoo misses Q2 2014 estimates on declining revenue

Business & Economy -

Yahoo continues to make strides under the leadership of Marissa Mayer, though it's the company's stake in Chinese online retailer Alibaba (which may IPO in 2014) that's proving to be particularly valuable.

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Copyright 2014 Reuters
Copyright 2014 Reuters

Yahoo July 15 released its Q2 2014 results, with the Sunnvayle, CA, company earning 37 cents per share on $1.04 billion in revenue, missing analysts' expectations of 38 cents per share on $1.08 billion in revenue. Yahoo generated $1.07 billion in revenue in Q2 2013.

Mayer defended Yahoo's disappointing Q2 performance, saying in an earnings call that "transformation is not a single event." She said the company's recent string of acquisitions was in part designed to bring high-quality talent to the company, talent who can help the company grow in the future.

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On Sept 12, Yahoo's stock price closed at 42.88, its highest level since January 10, 2006. Yahoo stock is up 3.4% for the year. Investors are likely buying up the stock in anticipation of Alibaba's IPO.

Yahoo currently has a 24% stake in Chinese online retailer Alibaba, which officially filed for a U.S. IPO on May 6. Yahoo revealed July 15 that it received permission from the retailer not to sell 208 million shares in the company that it had previously agreed to sell. Instead, Yahoo will now only have to sell 140 million shares upon IPO.

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