LIVE: Yahoo’s Q2 Earnings, Q3 Outlook Disappoint
Posted on July 21, 2009 |
Yahoo's second-quarter earnings are out now amid muted expectations. Its profit rose to $141 million, or 10 cents a share, from $131 million, or 9 cents a share a year ago. Net revenues fell to $1.14 billion from $1.35 billion a year ago, and gross revenues were down 13% to $1.57 billion. Yahoo was expected to report a profit of 8 cents a share on exactly that revenue level.
So here's the upshot: Yahoo beat forecasts on profit by a couple of pennies, thanks to cost-cutting, on sales that precisely met expectations. Just a few minutes into after-hours trading, however, its stock is down 2% 4% after closing down 1.5%, to $16.75 a share, before the report. Despite the higher-than-expected net profit, investors, who have driven shares up about 30% since the start of the year, likely were disappointed with operating earnings, which came in below analysts' forecasts. Operating profit for the quarter fell 25% from a year ago, to $101 million.
Worse yet, display ad revenues on Yahoo's own sites fell 14% from a year ago, a little worse than the 13% drop in the first quarter--no sign of a turnaround there. And search ad revenues fell 15%, far worse than Google's 3% growth. That won't help Yahoo in its negotiations with Microsoft over a search deal.
What's more, Yahoo's outlook for the third quarter came in somewhat below what Wall Street had hoped: $1.45 billion to $1.55 billion in revenues, operating income of $55 million to $65 million, and operating income before depreciation, amortization, and stock-based compensation of $330 million to $370 million. The Street had been betting on about $425 million in EBITDA on revenues of about $1.55 billion.
Here's the full release, with the liveblog of the analyst call to begin shortly, after the jump:
