Yahoo! Inc. (YHOO: Quote) on Monday reported an eight percent decline in fourth-quarter profit, hurt by costs related to its now defunct Korean business and higher tax payment, even as it saw a four percent growth in revenues on strength in its Search business, a sign that the company is sprucing up under Chief Executive Marissa Mayer.
Nonetheless, the company’s quarterly earnings and revenues came in above Street estimates, sending its shares up by more than four percent in after-hours trade on the Nasdaq.
“During the quarter we made progress by growing our executive team, signing key partnerships including those with NBC Sports and CBS Television, and launching terrific mobile experiences for Yahoo! Mail and Flickr…,” said CEO Mayer, who presided her first full quarter at the company.
Yahoo! has been aspiring to regain its lost glory in the search business, seeking to emulate the success of rival Google Inc. (GOOG), and fend off competition from nascent companies such as Facebook Inc. (FB). Recently at the World Economic Forum in Davos, CEO Mayer said that she sees Yahoo going back to its roots.
The Sunnyvale, California-based company reported fourth-quarter revenues of $1.35 billion, up 2 percent from $1.32 billion last year.
Excluding traffic acquisition costs, or ex-TAC, quarterly revenues totaled $1.22, up 4 percent from $1.17 billion in the prior year. Twenty-six analysts expected revenues of $1.21 billion for the quarter
Search revenue ex-TAC jumped 14 percent from last year, paid clicks rose about 11 percent, and price-per-click edged up 1 percent.
According to comScore data, Google Sites led the U.S. explicit core search market in November with 67 percent market share, followed by Microsoft Corp. (MSFT) Sites with 16.2 percent and Yahoo! Sites with 12.1 percent. Yahoo! trails Google in combined desktop and mobile visitors.
Yahoo!’s Display revenues ex-TAC for the quarter meanwhile slid 5 percent from last year. The number of ads sold on core Yahoo! Properties fell about 10 percent, while price-per-ad grew nearly 7 percent.
Other revenues ex-TAC rose to $273 million from $247.6 million.
The company reported fourth-quarter net income of $272 million or $0.23 per share, compared with $295.6 million or $0.24 per share last year.
Results for the quarter included costs of $99 million associated with the Korea business and its closure.
Excluding items, adjusted earnings for the quarter were $370 million or $0.32 per share, compared with $307 million or $0.25 per share a year ago.
On average, 24 analysts polled by Thomson Reuters expected earnings of $0.28 per share for the quarter. Analysts’ estimates typically exclude special items.
Google last week reported a better-than-expected increase in fourth-quarter profit, as the search engine giant benefited from strong advertising revenues and lower income tax, partly offset by charges related to its Motorola business.
YHOO closed Monday at $20.31, down 0.29%, on a volume of 31 million shares on the Nasdaq. In after hours, the stock gained $0.90 or 4.43%. In the past year, the stock has trended in a range of $14.35 – $20.52.
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by RTT Staff Writer
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