TIME Earnings

Yahoo’s Minuscule Growth Enough to Exceed Expectations

Yahoo! President and CEO Marissa Mayer delivers a keynote address at the 2014 International CES in Las Vegas, Nevada.
Yahoo! President and CEO Marissa Mayer delivers a keynote address at the 2014 International CES in Las Vegas, Nevada. Ethan Miller—Getty Images

The search giant had seen its revenue fall in four of the previous five quarters

Yahoo said Tuesday that third-quarter grew 1%. Here are the most important points from the company’s earnings report.

What you need to know: Yahoo beat Wall Street estimates with $1.15 billion in third-quarter revenue, up from $1.14 during the same quarter last year. Surprising analysts is always nice, but the Internet search giant should be especially happy about the revenue bump, even if it is just a 1% increase. Sales had declined in four of the previous five quarters, including a 3% year-over-year drop in this year’s second quarter.

Yahoo also reported earnings excluding certain costs (and a huge windfall from selling shares in the initial public offering of Chinese e-commerce giant Alibaba) of 52 cents per share, which trounced analyst predictions of 30 cents per share. The company’s profit jumped to $6.8 billion compared with the help of $6.3 billion in cash, after tax, that the company netted from selling a chunk of its Alibaba shares in September. In the year-ago quarter, Yahoo had reported a profit of $297 million.

Yahoo CEO Marissa Mayer described the quarter in a statement as solid.

“We achieved this revenue growth through strong growth in our new areas of investment – mobile, social, native and video – despite industry headwinds in some of our large, legacy businesses,” Mayer said.

Yahoo shares soared in after-hours trading, gaining almost 2.8% after finishing Tuesday trading up by 2.3% – one of many stocks on the tech-heavy Nasdaq composite to enjoy a strong day.

The big number: Yahoo said its third-quarter mobile revenue topped $200 million, the first time the company has revealed the amount of money it makes from showing ads on mobile devices. The company said gross mobile sales for the year will exceed $1.2 billion. Mayer said that Yahoo’s mobile investments – which include a $300 million acquisition of mobile analytics startup Flurry – have paid off for the company. In the current quarter, mobile revenue made up only around 17% of overall sales, far less than rivals like Facebook and Twitter.

“Not only are our mobile products attracting praise and engagement from users and industry awards, they are generating meaningful revenue for Yahoo,” Mayer said.

Meanwhile, Yahoo’s display ad revenue – the equivalent on online billboard ads – dipped again, falling 5% year-over-year to $447 million in the third quarter. (Interestingly, Yahoo said in its earnings release that the number of ads sold in the third quarter increased about 24%, but that seems to have been offset by the fact that the price of each ad declined by an equal amount.) Search ads continue to grow for Yahoo, though, with third-quarter revenue in that sector rising 4% to $452 million.

What you might have missed: Yahoo plans to spend some of the more than $6 billion in cash it netted from the recent Alibaba IPO on one or more tech start-up acquisitions, according to The Wall Street Journal. Mayer is expected to discuss Yahoo’s plan for potential acquisitions as well as cost-cutting measures – a discussion that comes a few weeks after activist investor Starboard Value revealed it had taken a stake in Yahoo and pushed for Mayer to reduce costs and consider a combination with AOL.

This article originally appeared on Fortune.com

TIME Security

Experts Warn Corporate Boards Aren’t Protecting Us From Hackers

A shopper walks past a large Home Depot logo inside a store
A shopper walks past a large Home Depot logo inside a store in New York,Tuesday, May 16, 2006. Bloomberg—Bloomberg via Getty Images

In the wake of hacks against Target, Home Depot and JPMorgan, analysts say companies' boards need to be more vigilant on cybersecurity

As an increasing number of major retailers and financial institutions are falling victim to hacks like those against Target, Home Depot and JPMorgan, many experts say corporate boards aren’t doing enough to protect customers from cybersecurity breaches.While corporate boards are a step removed from companies’ day-to-day operations, the increasing risk of data breaches means that boardmembers need to be more involved in cybersecurity, observers say, whether by pushing for security oversight or reshuffling executives who don’t react properly to crises.

“We live in the post-Target era,” said John Kindervag, security analyst at Forrester. “There’s a moral obligation to consider firing an executive team because of a data breach. It’s a huge business failure.”

Corporate boards rarely review cybersecurity plans or involve themselves in the particulars of data protection, traditionally viewing security as an information technology problem. According to a PriceWaterhouseCoopers report released last month, just 42% of 9,700 executives in over 150 countries said their boards are involved in security strategy; just 25% said their boards are involved in reviewing security and privacy threats.

“They’ll say to the CEO, what are we doing about security, and then don’t get involved at all until they get breached,” says Avivah Litan, security analyst at Gartner. “Most companies don’t communicate at that level with the board. They’re out of touch and they’re totally clueless about information security.”

Securities and Exchange Commissioner Luis Aguilar put it more gingerly to board directors earlier this month at a New York Stock Exchange cybersecurity conference. “There may be a gap that exists between the magnitude of the exposure presented by cyber-risks and the steps, or lack thereof, that many corporate boards have taken to address these risks,” Aguilar said. There’s a discrepancy, too, between what shareholders demand of boards and what they’re actually doing — a survey published by Institutional Shareholder Services (ISS) last month shows that nearly 70% of shareholders view board oversight actions prior to hacking incidents as “very important.”

Negligent boards may find themselves facing questions from angry shareholders and customers after a cyber breach. In June, ISS made the unusual recommendation that Target shareholders oust seven out of 10 members of its board after credit card information belonging to 40 million customers was compromised, laying blame on two board committees in particular.

“The data breach revealed that the company was inadequately prepared for the significant risks of doing business in today’s electronic commerce environment,” ISS advised. “The responsibility for oversight of these risks lies squarely with the Audit Committee and the Corporate Responsibility Committee.” Shareholders re-elected the board, but ISS’ condemnation was a wake-up call for retailers. Target is now facing an investigation from the Federal Trade Commission into the details of the breach.

Home Depot, meanwhile, was a founding member of a threat-sharing group of major retailers earlier this year, and its board received regular updates on cybersecurity, according to a spokesman. “IT and IT security have regularly been items on our board meeting agendas for several years now, and the board has received regular updates on the breach since it occurred,” said that spokesman. But the hardware retailer was caught flat-footed by a data breach this year that jeopardized 56 million customers’ credit cards, and managers ignored weaknesses in cyber defense before the attack, the New York Times reported last month.

Analysts say a strong board of directors should know how to ask management the right questions about cybersecurity. “The board is not responsible for identifying risk, but it sure as hell needs to know that management understands that responsibility and knows how to respond to it,” said Rick Steinberg, former governance practice leader at PricewaterhouseCoopers.

Ultimately, it might be a financial motivation that gets corporate boards to take a closer look at their firms’ cybersecurity standards. Target’s net income dropped more than $400 million in the quarter the breach was announced compared to the year before; the company said direct costs from the data breach would reach $148 million in the second quarter of 2014 alone. The total expense of any breach, including lost profits from nervous consumers, are often incalculable. “A data breach is the equivalent of an oil spill,” said Kindervag. “It’s a fundamental business issue.”

TIME Earnings

Coke Expands Its Cost-Cutting Program as Earnings Slide

Cans of Coca-Cola
Getty Images

The North America market remains a problem for the beverage giant and its top rival PepsiCo

Beverages giant Coca-Cola reported a 14% decline in third-quarter net income on Tuesday on a muted volume performance. Here’s what you need to know.

What you need to know: The North America market remains a problem for Coke and top rival PepsiCo, with both of the consumer-products behemoths reporting muted results for that market in the latest quarter, even as data shows Americans are spending more at grocery stores. Coke’s North America unit case volume was down 1% in the latest period, while Pepsi earlier this month reported flat revenue for the Americas beverages business.

Consumers are spending more on fresh produce, fresh grocery products and in the beverages aisle, favoring juices, flavored waters and other items that have fewer calories and less sugar than what Coke and Pepsi use in their products. Demand for carbonated soft drinks, the biggest category in the beverages business, has suffered a nearly decade-long slide. Coke on Tuesday said the “Share a Coke” campaign helped the company gain share in the sparkling beverage segment in North America, but volume still declined. Demand was also weaker for juices and sports drinks, though demand grew for tea, energy drinks and water.

Coke also didn’t post especially strong growth in any of the other markets it serves to help offset the North America weakness. Volume grew just 2% in Latin America and the Asia Pacific, and it feel 5% in Europe. The Eurasia and Africa region’s volume grew 5%.

The big number: 53 cents — that’s the adjusted profit Coke reported for the third quarter, and it matched the year-ago level and also what analysts had projected. The reported bottom line was dragged lower by $270 million in charges tied to a move to refranchise some bottling partners in North America.

Revenue totaled $11.98 billion, falling slightly short of the $12.12 billion projected by analysts. Citing some currency exchange fluctuations, Coke said it now expects profit for all of 2014 to be “below its long-term EPS growth targets.”

What you might have missed: Coke is targeting annualized savings of $3 billion per year by 2019. Coke issued a second press release Tuesday morning touting an “expanded productivity program” (typically, corporate lingo for cost-cutting) and a move to streamline its operations. While Chief Executive Muhtar Kent said Coke sees a challenging macroeconomic environment in 2015, the company’s plans to restructure its global supply chain, among other moves, will help the beverages company achieve a profit before tax target of 6% to 8%.

This article originally appeared on Fortune.com

MONEY Autos

The Price of Hybrid and Electric Cars Is Plummeting. Here’s Why

2012 Toyota Prius
Toyota Prius David Dewhurst

Among the trickle-down effects of cheaper gas prices are lower sales totals for alternative-fuel cars—which in turn have forced automakers to slash prices on these vehicles.

USA Today just reported that Ford is cutting the sticker price of the fully battery-powered plug-in Focus Electric by a flat $6,000. That’s on top of a $4,000 price reduction on the same vehicle a year ago. The new sticker price is $29,995 including shipping—but not including federal tax credits of up to $7,500 and state incentives that might effectively knock another $2,500 off the amount buyers pay.

Obviously, Ford wouldn’t be instituting such dramatic price cuts if the Focus Electric was selling well, and part of the reason sales have been poor is that the model doesn’t stand out in an increasingly crowded field of midlevel-priced plug-ins where the Nissan Leaf, the pioneer in the category, remains the indisputable leader. Another reason for underwhelming sales of the Focus Electric—and for many alternative-fuel cars in general, for that matter—is simply that gas prices have been getting cheaper and cheaper.

According to the AAA Fuel Gauge Report, the national average for a gallon of regular was just under $3.10 on Tuesday, compared with $3.35 a year ago and around $3.70 this past spring. Gas prices for the year as a whole are down slightly compared with 2013, and projections call for continued lower prices in 2015. All of which hurts automakers’ efforts to convince buyers that it’s a savvy move to pay a premium over a standard gas-powered vehicle for a hybrid or electric car right now, with the anticipation that they’d more than make up the difference later on in the form of savings on gas.

To help sales, automakers have been trying mightily to make the difference in price between alternative-fuel cars and their traditional car counterparts disappear. Nissan slashed the price of the Leaf in early 2013, effectively bringing the takeaway price of the vehicle under the $20,000 mark. Leaf sales have been strong throughout 2014, up 23% year over year thus far. Ford Focus Electric sales are up in the U.S. as well, with September units sold up 60% compared with the same month last year. Even so, we’re talking about extremely small numbers: 176 Focus Electrics sold last month, versus only 110 for September 2013.

What’s especially noteworthy is that the combination of lower gas prices and increasingly fuel-efficient internal-combustion engine cars appears to be putting the squeeze in particular on hybrid cars like the Toyota Prius. According to Toyota data, 14,277 Priuses were sold in the U.S. last month, compared with 15,890 for September 2013. For the year thus far, Prius sales are down 11.4% compared with the same period a year ago—and mind you, this slump took place a time when Toyota sales overall are up 5.7%. By far the worst-performing Prius has been the plug-in PHV; only 353 sold in September, a decline of 71% versus the same month a year ago (1,152). As for hybrid sales overall, a total of 31,385 units sold in the U.S. in September 2014, a decrease of 35% from the previous month, and a decline of 6.5% from the same month in 2013.

Bear in mind that the hybrid sales slump has occurred while automakers have gotten more aggressive with discounts. As Automotive News lately noted about the struggles of alternative-fuel cars:

Data from KBB.com show that Toyota boosted Prius incentives to $2,300 per vehicle in September from $1,400 a year ago while Ford ramped up C-Max spiffs to $4,900 from $2,650 per vehicle in the same period; neither move helped sales.

So cheaper gas prices benefit drivers not only in terms of the obvious—cheaper gas prices—but also because they’re forcing automakers to slash prices on hybrids and electric cars that boast savings on gas as a primary sales pitch.

TIME Autos

Supplier of Faulty Air Bags Sees Stock Plummet

Takata Airbags Lead Toyota, Nissan To Recall 3 Million Cars
The airbag unit for the passenger seat of a Toyota Motor Corp. vehicle is seen at the company's showroom in Tokyo, Japan, on Thursday, April 11, 2013. Koichi Kamoshida—Bloomberg / Getty Images

The share price on Takata Corp. nosedived after U.S. regulators warned drivers to have the airbags fixed "immediately"

Shares of the Takata Corporation dropped 23% on Tuesday following news that the airbag manufacturer had supplied potentially defective parts to a range of automakers, including Toyota, Honda and General Motors.

The market reaction was swift and decisive, the Wall Street Journal reports, after U.S. regulators issued an unusually urgent public warning to “act immediately” to resolve the defect.

The National Highway Traffic Safety Administration is investigating two deaths and a number of other incidents that indicate the airbags might explode under conditions of high humidity, potentially sending scraps of metal flying into passengers.

The warning prompted Toyota to recall 247,000 vehicles on Monday and warn passengers to avoid sitting in the passenger seat.

[WSJ]

TIME Media

CNN and Other Turner Stations Pulled From Dish Network

It's the latest sign that the pay-TV business model is under strain

CNN, Cartoon Network and other stations owned by Turner Broadcasting were pulled from the Dish Network lineup late Monday after negotiations between the two companies stalled. The incident is the latest flare-up in the pay-TV industry as television distributors balk at paying increasingly high programming costs to networks.

“In the past year, DISH has successfully renewed agreements with many large content providers,” Warren Schlichting, DISH’s senior vice president of programming, said in a statement. “As a result, we are confident that we have offered a deal to Turner that reflects an appropriate value for our customers.”

Turner fired back by claiming that Dish was the one who had led to the blackout. “Turner has worked diligently for months to come to a fair agreement including multiple extensions and compromises, and it’s unfortunate that Dish is once again operating in a disruptive manner that takes away networks and programming from their customers,” the company, a subsidiary of Time Warner, said in a statement.

Dish Network has about 14 million pay-TV subscribers, making it one of the largest providers in the U.S.

Spats between pay-TV operators and network owners have gotten increasingly contentious as operators have begun to shed video subscribers in recent years. A blackout of CBS on Time Warner Cable last summer lasted about a month, and the cable operator Suddenlink dropped Viacom channels indefinitely at the start of October. In their statements, both Dish and Turner indicated that they are trying to come to an agreement soon.

With HBO and CBS having just announced that they will offer their channels directly to consumers who don’t have cable, negotiations over programming costs may grow even more heated in the future. The growing discord in the pay-TV industry indicates that massive, expensive bundle of one-hundred-plus channels that we’ve all grown accustomed to may not be long for this world.

TIME Earnings

Warren Buffett Just Lost Another $1.5 Billion

Billionaire investor Warren Buffett speaks at an event on September 18, 2014 in Detroit, Michigan.
Billionaire investor Warren Buffett speaks at an event on September 18, 2014 in Detroit, Michigan. Bill Pugliano—Getty Images

Losses in IBM and Coke add to a recent rough patch for Buffett

Another day, another $1 billion down the market’s drain. Spare a thought for Warren Buffett, whose portfolio is not doing him any favors this week. On Monday Buffett lost nearly $1 billion on his third-largest investment, IBM, after the company posted disappointing earnings. On Tuesday, Coca-Cola did the same thing, posting third-quarter revenue that fell short of expectations and warning of currency headwinds.

Coke is Buffett’s second-largest investment and has been one of the stalwarts of his portfolio for decades. (He left Coke’s board in 2006 and his son Howard took a board seat there in 2010). With 400 million shares, Tuesday’s decline of $2.72 cost…

Read the rest of the story from our partners at NBC News

TIME Companies

Google Inks $542 Million Venture Deal to Fund Mysterious Startup

2013 Google Developer Conference Continues In San Francisco
An attendee tries Google Glass during the Google I/O developer conference on May 17, 2013 in San Francisco, California. Justin Sullivan—Getty Images

The four-year-old firm Magic Leap aspires to blend computer generated images into the physical world

Google and several other leading tech firms have pooled $542 million in venture capital funding for Magic Leap, a secretive, Florida-based startup that is rumored to be working on virtual reality eyewear.

The deal, one of the largest venture capital fundraisers to date, would value the company at nearly $2 billion, two sources close to the negotiations told the Wall Street Journal. Two senior Google executives will join Magic Leap’s board of directors.

Little is known about Magic Leap beyond an eye-popping video of what the company hopes to achieve with its technology: a projection of life-like imagery that seamlessly blends with the physical surroundings. This deal echoes Facebook’s acquisition of Oculus Rift, a virtual reality headset that immerses users in graphically rendered 3-D worlds.

Both technologies point to a gamble within the tech industry that interfaces will ultimately break free from the confines of 2-D screens and form more immersive user experiences.

[WSJ]

TIME France

Oil Exec Who Charmed Kings and Dictators Killed in Plane Crash

Total CEO Christophe de Margerie Dies in Plane Crash
Christophe de Margerie, chief executive officer of Total SA, reacts during a Bloomberg Television interview on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Friday, Jan. 24, 2014. Simon Dawson—Bloomberg/Getty Images

Tributes For Total CEO Killed When His Jet Hit a Snowplow On Russian Runway

Christophe de Margerie, the CEO and chairman of the French energy giant Total who was killed in a private plane accident in Moscow on Monday night, was fond of saying that one couldn’t drill for oil in pleasant, peaceful places — a riposte to environmentalists and human-right activists who have railed against oil companies for cutting lucrative deals with repressive leaders. “I’d be more than delighted to go find energy in Club Med,” he told TIME back in December 2009, seated on a private plane during an overnight flight from Paris to the Persian Gulf state of Bahrain. “But we’ve tried, and did not find it.”

It was a characteristically blunt statement in an industry that is famous for its opaque leadership rather than plain-talking executives. Unlike his peers, De Margerie, 63, seemed unconcerned about what he said publicly. Rather, he appeared to relish his image as an outsized personality whose common touch — despite his wealthy family background — won him friends, as well as some detractors, in difficult, even hostile, places. Explaining his personality, he told TIME that his lifelong shyness (“I hate going on stage, I’m really scared,” he said) had compelled him from childhood to become a keen observer of people, and that he had learned to “listen to people, from the hotel doorman to the King of Saudi Arabia.”

Tributes flooded in on Tuesday after news broke that De Margerie had died on his way back from Moscow where he had attended a gathering of foreign investors and met with Russian Prime Minister Dmitry Medvedev at Medvedev’s country residence near the capital. The private plane in which De Margerie was traveling collided with a snowplow at Moscow’s Vnukovo International airport shortly before midnight, killing him and three French crew members on board. Russian investigators quickly blamed the operator of the plow (who survived unscathed), saying that the man was drunk, and adding that air traffic controllers might also have made errors. Kremlin spokesman Dmitry Peskov voiced President Vladimir Putin’s condolences, saying that the Russian leader “has long known De Margerie [and] had a close working relationship with him.” In Paris, President François Hollande said De Margerie had “brilliantly defended the level of excellence and success of French technology,” and praised his “independent character” and “originality.”

Indeed, it seemed hundreds of people across the world knew De Margerie — if only as the man with the abundant gray whiskers framing his corpulent cheeks, which had earned him the nickname of “Monsieur Moustache” among his employees.

De Margerie joined the company in 1974 fresh out of university, largely, he told TIME, because it was a 10-minute walk from his family home in western Paris, and because his youthful dream of becoming a motorcycle policeman had come to naught. He rose to head its crucial exploration and production department, helping to expand hugely Total’s operations across the world. He became CEO in 2007 and chairman in 2010. During his career the company faced several serious accusations of wrongdoing. He and other Total executives faced charges in France of helping then Iraqi President Saddam Hussein skirt the U.N.’s oil-for-food sanctions during the 1990s and although they were cleared, the company paid a fine in the U.S. And after an oil tanker broke apart and sank off the Brittany coast in 1999, spewing thousands of tons of oil into the sea and killing an estimated 150,000 sea birds, a Paris court ordered Total to pay more than $250 million in damages.

Apparently unaffected by these controversies, De Margerie steadily built Total into a giant company, opening new fields across the world — including in places from which other energy companies steered clear, like Burma and Yemen. Total is now the fourth biggest Western oil company, after ExxonMobil, Royal Dutch Shell and Chevron, with nearly 100,000 employees in 130 countries and revenues of nearly $240 billion last year.

But De Margerie will likely be remembered most of all for his insistence that governments should as much as possible leave it to oil companies to decide where to operate. And it is that insistence that led him most regularly into fiery debates with activists, who accused Total of cozying up to dictators in order to win concessions that were worth billions.

De Margerie, unlike other oil executives, never shied away from the argument, telling journalists that the world could face a serious oil shortage — an argument that seems less urgent these days, with declining growth in demand for oil and sinking prices on the world oil markets. “Where is electricity coming from? Flowers?” he told TIME during the flight from Paris to Bahrain in late 2009. “Maybe some day. But what’s available now is from oil and gas,” he said.

De Margerie defended his decision to extract natural gas in Burma and pipe it across the country at a time when U.S. sanctions prevented most American business links with the military government, telling an audience of Columbia University students in 2009, “Who is telling us who are the cowboys and who are the Indians? People who have never been in those countries.” As such, De Margerie nurtured relationships even under sanctions — including in Russia, where Total has a $27-billion deal to produce liquefied natural gas in Siberia.

Gregarious, with a love of fine dining — his grandfather Pierre Taittinger founded the famed Champagne house of that name — De Margerie was known to be excellent company, no matter one’s views. During the all-night flight on the rented private plane he slept little, preferring to talk for hours about everything from politics to the latest celebrity gossip, and to debate which Bordeaux wine on offer in the plane was best. Back then, Total executive Jacques de Boisseson, who heads the company’s exploration and production operations in Russia, told TIME that his boss had a knack for breaking the ice even in formal meetings with heads of state — and even after arriving late, as he frequently did. “He changes a meeting with his personal touch,” de Boisseson said. “He can get very close to very different people.”

TIME apps

Tinder Thinks You’ll Pay to Find a Match. Swipe Right?

Does this mean there will be less bathroom mirror selfies?

Money can’t buy love, but it might be able to buy you a better Tinder date.

The free, location-based mobile dating app, which allows users to swipe right in hopes of finding a match and left to pass, will begin offering “a few premium features” come November, CEO and co-founder Sean Rad recently said at the Forbes Under 30 Summit.

Rad didn’t provide many details, Forbes reported from the event in Philadelphia, but said the new features are ones that “users have been begging us for” and “will offer so much value we think users are willing to pay for them.”

Does this mean less bathroom mirror selfies? Probably not. But Rad hinted that the pay-for-play features might focus on opening up location restrictions, allowing people to make connections while they’re traveling to new places. He also said the “premium” options will cater to areas outside of romance, like “local recommendations when traveling, trying to make friends, doing business.”

“Revenue has always been on the road map,” he added.

But don’t worry, you can still swipe for free while procrastinating at work: “The core offering will always remain free,” Rad said. “At least that’s the plan.”

Watch the full interview below:

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