Yahoo! Inc. (Nasdaq: YHOO) reported Q4 earnings after closing bell today (Tuesday), and Chief Executive Officer Marissa Mayer has done it again. Mayer has a perfect track record for beating estimates in every quarter since she took the reins in 2012.
Earnings per share came out to $0.46, shattering analysts' expectations of $0.38 by $0.08 per share. The digital media giant has beaten its per-share profit projections in each of the past eight quarters.
But the good news ends there.
Yahoo stock plunged sharply in after-hours trading today following earnings release, after closing at $38.22 per share. As of 4:30 pm EST, it's down 4.58% to $36.47 – and for good reason:
Under Mayer's leadership, Yahoo's core business has actually suffered declining revenue – today's report shows a 6% decline to $4.68 billion for all of 2013.
Moreover, Mayer's tenure has failed to boost Yahoo's share in its core business. Yahoo's display advertising business dropped 6%, according to today's report.
Mayer's strength is said to be in her ability to make quality acquisitions. Yahoo bought more companies in its year and a half with Mayer than the previous 10 years combined.
And today, Mayer insisted her approach will eventually pay off:
"I'm very pleased with our execution, especially as we've continued to invest in and strengthen our core business," Mayer said in the earnings release. "In Q3, we launched new user experiences across many of our digital daily habits – Yahoo Screen, My Yahoo, Fantasy Sports, and more. Now with more than 800 million monthly users on Yahoo – up 20 percent over the past 15 months – we're achieving meaningful increases in user engagement and traffic."
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As 2014 ticks on, YHOO stock investors should key in on the health and monetization of the acquisitions Yahoo is now leaning on to boost traffic and advertising.
In fact, the performance of this one company alone could make or break YHOO earnings moving forward…