Yahoo! meets expectations
( 2001-10-11 09:37 ) (7 )

Third-quarter earnings at Yahoo! Inc met Wall Street expectations on Wednesday, pleasing investors who sent the stock 7 per cent higher in after-hours trading.

The earnings report was being studied closely because it was one of the first from a major Internet company since last month's attacks. Online advertising already has been slumping for nearly a year and is expected to get even worse along with the overall economy.

In the three-month period ending September 30, Yahoo had its fourth straight quarterly net loss US$24.1 million, or 4 cents a share, on revenue of US$166.1 million. In the comparable period last year, Yahoo showed a net profit of US$47.7 million, or 8 cents per share, on revenue of US$295.5 million.

Excluding investment losses and other one-time events, Yahoo said it would have earned US$8.4 million, or 1 cent per share. Analysts surveyed by Thomson Financial/First Call were expecting to see 1 cent per share and US$170 million in revenue.

Shares of Yahoo, which rose 77 cents, or 8 per cent, to US$10.93 in regular trading on the Nasdaq Stock Market, rose another 70 cents to US$11.70 in after-hours trading following the release of the report.

"While we find ourselves in an unprecedented environment of economic uncertainty, the recent tragic events in the United States have proven that the Internet is a highly valuable global communications and information delivery medium," said Yahoo's chairman and chief executive, Terry Semel.

Yahoo said it expects to see between US$160 million and US$180 million in revenue in the current quarter and break even or earn up to 1 cent per share, excluding charges. Analysts were expecting US$190.8 million in revenue and earnings of 1 cent per share.

Like most businesses, Internet companies had a rough time after the September 11 attacks. Yahoo was one of several popular sites that pulled some advertising.

Nielsen/NetRatings said US 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.

In the first nine months of 2001, Yahoo lost US$84.1 million, or 15 cents per share, on revenue of US$528.5 million. In the first three quarters of last year, Yahoo earned US$168.6 million, or 27 cents per share, on revenue of US$799.3 million.