Yahoo’s net profit and revenue fell in the first quarter, but came in slightly better than expected by Wall Street analysts, sending shares in the Internet company higher in after-hours trading.
Yahoo said net profit fell 28 percent in the first quarter compared to a year ago to US$223 million while revenue declined 24 percent to US$1.2 billion.
Net revenue, which excludes traffic acquisition costs, the portion of revenue Yahoo shares with its partners, fell 6 percent to US$1.06 billion.
Earnings per share were down to US$0.17 from US$0.22 a year ago.
Yahoo said the decline in net revenue was primarily due to the revenue share from its Internet search agreement with Microsoft.
Microsoft and Yahoo entered into a search and advertising partnership in 2009, which calls for the US software giant to eventually power searches at all Yahoo Web sites.
Yahoo said display advertising revenue increased 10 percent to US$471 million in the quarter, while search revenue fell 19 percent to US$357 million.
Yahoo said it expected net revenue for the second quarter of between US$1.07 billion and US$1.12 billion.
The quarterly results for the Sunnyvale, California-based Yahoo, while down year-over-year, were slightly better than expected by Wall Street analysts and Yahoo shares gained 2.67 percent to US$16.55 in after-hours trading.
Yahoo chief executive Carol Bartz, in a conference call with financial analysts, said the search market “is encountering some issues related to Microsoft Ad Center technology.”
She said it was not producing the revenue per search that had been expected, but there “is a clear plan to address that” and the problems should be worked out by the end of the year.
“Overall our turnaround is proceeding on schedule and we are very confident Yahoo is heading in the right direction,” said Bartz, who was brought in a little over two years ago to help right the struggling Internet giant.
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