Yahoo barely beat Wall Street estimates for its first quarter earnings report, but the stock shot up following more positive news about one of the company's secret weapons: Alibaba.
The Internet giant posted earnings of $0.38 per share on revenue of $1.09 billion in the first quarter, just beating Wall Street estimates for earnings of $0.37 a share on revenue of $1.08 billion. Yahoo's results were essentially flat compared to the same quarter last year when it reported earnings of $0.38 per share on revenue of $1.07 billion.
Yahoo's display revenue grew 2% year-over-year, a modest increase considering that it was on the decline this time last year. However, the price-per-ad declined by 5% in the quarter. Search revenue increased by 9%.
The most impressive number in the report had little to do with Yahoo's business itself. Alibaba, the Chinese ecommerce giant that Yahoo has a large stake in, grew its revenue by 66% in the fourth quarter to $3.06 billion. Some investors see Yahoo as a proxy for Alibaba, which is expected go public later this year.
Yahoo stock topped $40 earlier this year, but has since receded into the mid-$30 range. The stock shot up by more than 10% at one point after hours following the earnings report.
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