|
Yahoo! edges estimates
|
 |
July 11, 2001: 7:01 p.m. ET
Internet media company sees lower earnings, but beats forecasts
|
NEW YORK (CNNfn) - Internet media company Yahoo! Inc. on Wednesday reported sharply lower second-quarter financial results, but edged Wall Street expectations on better-than-expected sales as the company continued to struggle with the slowing economy and a declining advertising market.
The company also reiterated earnings guidance for the third quarter and fiscal 2001, though its third-quarter revenue forecasts of $160 million-to-$180 million falls short of Wall Street's $184 million estimates, according to earnings tracker First Call.
Though earnings and revenue were under pressure in the quarter, the company was encouraged by growth in users and page views.
For the quarter ended June 30, Yahoo! reported earnings of $8.7 million, or a penny a share, compared with earnings of $69.1 million, or 11 cents a share, a year earlier. Analysts on average anticipated break even per share results, according to First Call.
Second-quarter revenue fell to $182.2 million from $273 million, but bettered Wall Street expectations for revenue of $175.1 million, according to First Call.
Including $45.5 million in restructuring and acquisition-related charges, the company posted a net loss on the quarter of $48.5 million, or 9 cents a share, compared with net income of $53.3 million, or 9 cents a share, a year earlier.
Shares of Yahoo! (YHOO: Research, Estimates) fell 80 cents to $17.03 in Nasdaq trading ahead of the earnings news but then soared $2.37 to $19.40 in after-hours trade following the release.
"There is no single event that will transform this company. Rather, it will be a series of events starting this quarter that will demonstrate Yahoo!'s momentum and progress," said CEO Terry Semel, who replaced Tim Koogle earlier this year. "In order to strengthen and grow the business, we will pursue partnerships and joint ventures with major corporations, make acquisitions, and continue to innovate and develop new services."
Executives of the Sunnyvale, Calif.-based Internet bellwether lowered expectations for the second quarter and all of 2001 when the company reported first-quarter results in April. The company, which derives roughly 85 percent of its revenue from online advertising, has been stung by a sharp slowdown in that market.
Advertising to pick up in 2002
During a conference call with analysts after releasing earnings, Semel said he was encouraged by the future prospects for the company and projected an improved advertising market by the middle of fiscal 2002.
"I believe online advertising will increase in importance and ultimately will get a larger share of company's overall marketing budgets," Semel said. "We see this time as our opportunity to regroup, rebuild and be stronger than ever for when ad spending picks up again around the middle of 2002."
The company reiterated revenue guidance of $700 million-to-$775 million for fiscal 2001. By year end, revenue from non-advertising sources are expected to approach 20 percent of total revenue.
Yahoo! also anticipates third quarter earnings per share to be about break even. That's within the range of Wall Street's forecast of a penny a share profit for the quarter, according to First Call.
The company expects full-year earnings per share between 2 cents and 6 cents, within the range of forecasts.
In response to the sharp slowdown in online advertising sales, Semel said Yahoo! is moving from primarily an ad-supported business model toward more fee-based services aimed at businesses as well as more subscription-based consumer services. Executives also have promised to take a number of measures aimed at cutting costs.
Semel reiterated that new strategy during the call with analysts.
"While advertising revenue will always be an important part of our revenue base, we will leverage non-core assets to deliver premium services," Semel said.
Click here to check Internet stocks
The company already has laid off more than 420 employees and said it will make additional moves, including: discontinue or reallocate some secondary services on its network of properties; decrease discretionary marketing, distribution and promotional expenses; outsource some operations; and centralize some businesses across its global organization.
In April, Yahoo! named Semel chairman and CEO. Semel, formerly chairman and co-CEO of Warner Brothers, replaced Tim Koogle, who is currently vice chairman and is expected to relinquish that title next month.
The company logged 200 million unique users in June compared with 156 million the same period last year. Additionally, 71 million active registered members logged on during the month and its traffic increased to 1.2 billion page views per day.
In a separate announcement Wednesday, Yahoo! said it appointed four new senior executives to its worldwide management team.
Mark Opzoomer has been named the managing director and regional vice president of Yahoo! Europe. Allan Kwan has joined Yahoo! as the new regional vice president and managing director of Yahoo!'s North Asia operations, and S.I. Lee will head Yahoo! Korea's business operations. John Glascott takes over as regional vice president, for the eastern region of the United States. 
|
|
|
|
|
|
Yahoo!
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
