Yahoo! Meets Expectations
SAN JOSE, Calif. (AP) _ Shares of Yahoo! Inc. rose 3 percent in extended trading after the Internet bellwether met Wall Street expectations for its third-quarter earnings and slightly reduced its targets for the current quarter.
Chairman and chief executive Terry Semel also said Wednesday that Yahoo will streamline its 44 business units in a restructuring plan that likely will include layoffs. Details are to be announced at the company's meeting with financial analysts next month.
``I think we'll be tighter, leaner, easier to run,'' he said. ``We'll all see where we're going much more readily.''
Yahoo imposed the first layoffs in its six-year history in April, cutting 420 jobs _ 12 percent of its work force.
In the three-month period ending Sept. 30, Yahoo had its fourth straight quarterly net loss: $24.1 million, or 4 cents a share, on revenue of $166.1 million. In the same period last year, Yahoo showed a net profit of $47.7 million, or 8 cents per share, on revenue of $295.5 million.
Excluding investment losses and other one-time events, Yahoo said it would have earned $8.4 million, or 1 cent per share. Analysts surveyed by Thomson Financial/First Call were expecting to see 1 cent per share and $170 million in revenue.
Shares of Yahoo, which gained 77 cents, or 8 percent, to $10.93 in regular trading on the Nasdaq Stock Market, rose another 37 cents to $11.30 in extended trading following the release of the report.
Yahoo, based in Sunnyvale, Calif., said it expects to see between $160 million and $180 million in revenue in the current quarter and break even or earn up to 1 cent per share, excluding charges. Analysts were expecting $190.8 million in revenue and earnings of 1 cent per share.
The reduction in the revenue estimate includes between $5 million and $15 million in sales expected to be postponed or lost because of last month's attacks, said Susan Decker, the chief financial officer.
Semel said in July that the slumping online advertising market was unlikely to pick up until the middle of 2002. He said Wednesday he has no reason to believe such a turnaround would happen any sooner or any later than that.
``This economic climate is unprecedented,'' Semel said. ``If we found it hard to read the economic picture even before this, now the picture is even more obscured.''
Yahoo said it now has 210 million registered users, 80 million of whom actually logged on to the site in September. But most of them have been cool at best to Yahoo's new subscription-based offerings, which the company hopes can continue to reduce its reliance on advertising.
Semel said Yahoo would soon roll out packages with several services bundled together, for better value.
Like most businesses, Internet companies had a rough time after the Sept. 11 attacks. Yahoo was one of several popular sites that pulled some advertising.
Nielsen/NetRatings said U.S. Internet usage dropped in September. Fewer people went online, and those who did spent an average of 17 hours surfing the Web, down from more than 18 hours in August.
``It's a tough backdrop for the best of companies,'' said American Express analyst John Faig, who believes Yahoo stock remains too expensive despite its long slide. ``There clearly have been better times in history to reboot your business.''
In the first nine months of 2001, Yahoo lost $84.1 million, or 15 cents per share, on revenue of $528.5 million. In the first three quarters of last year, Yahoo earned $168.6 million, or 27 cents per share, on revenue of $799.3 million.