Yahoo's shining third quarter earnings are not a result of its business but its massive cost-cutting measures.

Yahoo has suffered a huge backlash after the company admitted that it was a victim of a data breach in 2014. The company said up to 500 million user accounts on its platform were compromised. This comes as Yahoo is under pressure to complete its $5 billion sale to Verizon Communications.

A lot of questions remain unanswered in relation to the data breach: What information did the hackers steal from users? Was Yahoo corporate email also compromised? And, very importantly, did Yahoo CEO Marissa Mayer know something about the hacking incident and when did she know it?

As a result of this mess, Yahoo's business suffered in the third quarter. Verizon's lawyer announced last week that the revelation of the data breach means the deal has to be renegotiated.

Yahoo's third quarter earning, which was released on Tuesday, was the company's first fiscal update since declaring its agreement to sell its digital works to Verizon in July.

The figures show that Yahoo is profiting. But what looks like a big gain is the result of the company's cost-cutting agenda that has led to the elimination of 2,200 workers, or about one-fifth of its workforce.

The Sunnyvale, California-based corporation earned $163 million, or 17 cents per share in the third quarter. This represents a growth of more than two-fold from the corresponding quarter last year. Yahoo's revenue jumped by 14 percent to $857 million after deducting promotional fees for July to September.