3:11 PM
Yahoo disappoints on revenue forecast
Addison Ray
By Alexei Oreskovic
SAN FRANCISCO | Tue Oct 19, 2010 5:24pm EDT
SAN FRANCISCO (Reuters) - Yahoo Inc's fourth-quarter revenue forecast disappointed Wall Street, as the Web portal continues to struggle to revitalize growth and stave off rivals such as Google Inc and Facebook.
Yahoo, the No. 2 U.S. search engine behind Google, projected fourth-quarter revenue, excluding traffic acquisition costs, of $1.125 billion to $1.225 billion. Analysts were looking for revenue of $1.26 billion, according to Thomson Reuters I/B/E/S.
"The revenues were a little bit light and the guidance is also sort of uninspiring," said Clay Moran, an analyst at the Benchmark Company.
Moran said the 17 percent revenue growth from online display ads on Yahoo's owned and operated websites during the third quarter was weaker than expected.
Net income in the three months ended September 30 was $396.1 million, or 29 cents a share, compared with $186 million, or 13 cents a share, in the year-ago period. But Yahoo said its earnings included a 13 cent benefit from the sale of its "HotJobs" Web service. Analysts had expected earnings of 15 cents a share.
Net revenue, which excludes revenue it shares with website partners, totaled $1.12 billion in the third quarter, compared with $1.13 billion in the year-ago period and slightly below the $1.13 billion expected by analysts.
Yahoo shares have gained more than 6 percent since reports last week that a variety of private equity firms, including Silver Lake Partners, were exploring a potential buyout of the company. They were holding steady at $15.44 in extended trading on Tuesday.
(Reporting by Alexei Oreskovic; Editing by Richard Chang)
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