Yahoo Inc. (NASDAQ:YHOO) released the earnings results from its most recently completed quarter after closing bell tonight, posting adjusted earnings of 52 cents per share on $1.09 billion in revenue, excluding traffic acquisition costs. Analysts had been expecting the search giant to post earnings per share of 32 cents on $1.05 billion in revenue. In the same quarter a year ago, Yahoo reported $1.08 billion in revenue and earnings of 34 cents per share.

Yahoo! Inc. Smashes Earnings Estimates

Yahoo!’s key earnings metrics

GAAP earnings per share were $6.70, compared to 28 cents per share in the same quarter a year ago. This year’s GAAP earnings include proceeds from the sale of $6.3 billion worth of Alibaba Group Holding Ltd (NYSE:BABA) shares. The sale of those Alibaba shares added $6.27 per diluted share to Yahoo’s GAAP earnings result.

GAAP revenue was $1.15 billion. Adjusted EBITDA fell 8% year over year to $306 million.

Yahoo’s results by segment

Yahoo reported $447 million in GAAP display revenue, which is a 5% year over year decline. Display revenue excluding traffic acquisition costs fell 6% to $396 million. The company sold about 24% more ads in the third quarter of this year compared to last year. Also the price per ad fell by about 24% year over year.

GAAP search revenue rose 4% year over year to $452 million. Excluding traffic acquisition costs, search revenue rose 6% to $450 million. Yahoo reported that the number of paid clicks was flat year over year and that the price per click rose by about 17% year over year.

Yahoo CEO Marissa Mayer said the company’s mobile revenue is now “material,” as it surpassed $200 million on a GAAP basis. They expect full year gross mobile revenue will pass $1.2 billion this year, which is an important milestone, as the company has been heavily investing in its mobile efforts.

“We are pleased with our performance this quarter, demonstrating results that met or exceeded guidance on key metrics,” said Yahoo Chief Financial Officer Ken Goldman in a statement. “We ended the quarter with over $12 billion in cash and marketable securities following the sale of 140 million shares of Alibaba stock in the IPO, which resulted in $9.4 billion in pre-tax proceeds.”

What about the Alibaba cash?

One of the things investors want to hear about in tonight’s earnings call is Yahoo’s stake in Alibaba. The search giant pledged to return at least half of the after-tax proceeds it earned from the Alibaba sale. Goldman said that in the third quarter and so far in the fourth quarter, they have repurchased about $1.6 billion worth of shares. Of that amount, the company returned $1.4 billion to shareholders as part of the plan to return cash from the Alibaba share sale.