Yahoo! on a high as profits inch up

Internet bellwether Yahoo! on Tuesday posted higher third-quarter profit and revenue from a year ago and beat analysts' expectations, saying the record results were due to solid growth across its business. For the period ended 30 September, the company posted net profits of $253.8m, or 17 cents per share, up from $253.3m, or 17 cents, a year ago. Excluding the net impact of $16m, or 1 cent per share, related to the sales of investments, Yahoo! posted net profits of $238m, or 16 cents per share.

Revenue was $1.33bn, up 47 per cent from $907m for the same period a year ago. Excluding traffic acquisition costs, revenue was $932m.

Analysts polled by Thomson Financial had expected Yahoo! to post profits of 14 cents per share, on average, and revenue of $918m for the third quarter excluding traffic acquisition costs.

Last quarter, the company had forecast that revenue, excluding traffic acquisition costs, would be $880m to $930m for the third quarter.

Yahoo! was ranked as the top internet portal, with nearly 66 per cent active reach, in September, according to figures from Nielsen/NetRatings.

Susan Decker, chief financial officer, said in a statement: "We are extremely pleased with our third-quarter results, which exceeded expectations, showing strong revenue growth, continued profitability, and significant free cash flow."

Elinor Mills writes for CNET News.com