Yahoo Chief Executive Marissa Mayer didn't mince words when it came to the company's second-quarter earnings.
"Our top priority is revenue growth and by that measure, we are not satisfied with our Q2 results. While several areas showed strength, their growth was offset by declines," Mayer said in a statement. "I believe we can and will do better moving forward."
The online search giant released its earnings after stock markets closed Tuesday. For the three months ended June 30, it reported revenue of $1.08 billion, down 4% compared with a year earlier. Revenue excluding traffic acquisition costs was $1.04 billion, down 3%.
Profit, meanwhile, totaled $270 million, a 19% decrease compared with $331 million in the second quarter of 2013. Adjusted earnings per share was 37 cents.
Analysts had expected an adjusted profit of 38 cents a share.
One area of weakness was display advertising. Display revenue was $436 million for the second quarter, an 8% decrease compared with $472 million a year earlier.
Although the number of ads sold increased about 24%, the price per ad decreased roughly 24% compared with the second quarter of 2013.
Shares of Yahoo fell 9 cents, or less than 1%, to $35.61 during regular trading. They rallied slightly after-hours, rising more than 1%.
Yahoo also revealed some of its plans for its sizable 23% stake in Chinese Internet behemoth Alibaba, which is expected to go public next month.
Ken Goldman, chief financial officer of Yahoo, said the Sunnyvale, Calif., company had amended its share repurchase agreement with Alibaba, reducing the number of shares that Yahoo is required to sell at the IPO to 140 million shares from 208 million shares.
"In addition, we are aware that there has been much discussion around the allocation of the Alibaba IPO proceeds,” Goldman said. “We would like to take this opportunity to let our investors know that we are committed to return at least half of the after-tax IPO proceeds to shareholders, in line with our overarching commitment to maximizing shareholder value through prudent capital allocation.”
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