Tuesday, October 20, 2009
Yahoo 3Q profit soars despite 12 pct revenue drop
Yahoo Inc. may finally be pulling out of a three-year slump that cast aside two CEOs and spurred a cost-costing spree that laid off about 2,000 workers. The purge is the main reason Yahoo's third-quarter profit more than tripled from last year to soar past analysts' relatively low expectations for the troubled Internet company. But the results released Tuesday also showed Yahoo's revenue fell by at least 12 percent for the third consecutive quarter. The revenue rut means Yahoo still has a long way to go on its comeback trail. Analysts, though, believe Yahoo should be able to boost its ad sales - the main source of its revenue - as long as the U.S. economy continues to heal and marketers funnel more of their budgets to the Web. Carol Bartz, Yahoo's third chief executive since June 2007, indicated she believes the worst is over in a prepared statement. "We had a solid third quarter that signals our major businesses have stabilized," she said. The Sunnyvale-based earned $186 million, or 13 cents a share, in the July-September quarter, compared with $54 million, or 4 cents a share, at the same time last year. The average analyst estimate among analysts polled by Thomson Reuters was 7 cents per share. Revenue for the period fell 12 percent $1.58 billion, barely an improvement from the first six months of the year when revenue dropped by 13 percent. The earnings improvement was primarily driven by a series of layoffs that has whittled Yahoo's payroll from 15,200 employees in September 2008 year to 13,200 at the end of last month. Yahoo shares gained 38 cents, or 2.2 percent, to $17.55 in extended trading. In regular trading earlier, shares fell 5 cents to close at $17.17.