Yahoo’s first-quarter financial results issued on Tuesday slightly exceeded Wall Street’s expectations, but analysts said the numbers were not likely to aid Yahoo’s efforts to fend off Microsoft’s hostile bid or to extract a higher price.
Yahoo chief executive Jerry Yang (楊致遠) said that the company’s solid performance reaffirmed the board’s conviction that Microsoft’s unsolicited takeover offer undervalued Yahoo.
Still, Yang said Yahoo remained open to “any and all” alternatives, including a deal with Microsoft.
Analysts said shareholders were likely to be relieved that Yahoo’s business appeared to have avoided any fallout from the economic slowdown. But they said the results would not break the stalemate between the companies.
“It was a solid quarter,” said Clayton Moran, an analyst with the Stanford Group. “But I don’t think it is something that will significantly alter the dynamics of the Microsoft negotiations.”
Earlier in the day, Microsoft, which has been adamant in its refusal to raise its offer for Yahoo, had already begun to play down any possible impact from Yahoo’s results.
“I wish Yahoo all the success with its results but it doesn’t affect the value of Yahoo to Microsoft,” Microsoft chief executive Steven Ballmer said on Tuesday in Morocco, a Reuters report said.
Ballmer has said recently that Yahoo’s business appears to be deteriorating. Analysts said the company’s results proved otherwise.
Yahoo said its net income, buoyed by an investment gain, rose sharply to US$542 million, or US$0.37 a share, from US$142 million, or US$0.10, a year earlier. The figure included a net noncash gain of US$401 million from Yahoo’s stake in Alibaba Group (阿里巴巴集團), a Chinese company, after the initial public offering of Alibaba.com.
Revenue grew 9 percent to US$1.81 billion. Net revenue, which excludes commissions paid to marketing partners, grew 14 percent to US$1.35 billion, slightly higher than the US$1.32 billion analysts had forecast. Yahoo had repeatedly forecast that net revenue would increase from 8 percent to 17 percent.
In a conference call with analysts, Yang said the results underscored “the fact that our strategy and investments are beginning to pay off.”
“Our ability to execute on multiple fronts is clearly improving,” Yang later added.
Yahoo raised profit forecasts for the remainder of the year, but left revenue growth projections unchanged.
“They didn’t put out a poor performance, and that was important,” said Christa Quarles, an analyst with Thomas Weisel Partners.
“But they didn’t put up a game-changing performance to the extent that revenue guidance remained the same. I don’t think Microsoft is going to look at this and say that things are dramatically different,” she said.
Investors appeared to echo that view.
After the report was issued, Yahoo shares fell slightly in after-hours trading, losing about US$0.15. They had closed at US$28.54, down US$0.01, in regular trading.
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