Yahoo’s earnings slip but not as far as projected

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGame Center: Chargers at Kansas City Chiefs, Sunday, 10 a.m.Analysts entered the quarter with low expectations after Yahoo struggled through the first half of the year in spite of an online advertising boom. The company’s third-quarter results exceeded the average earnings estimate of 8 cents per share among analysts surveyed by Thomson Financial. Revenue for the period totaled $1.77billion, a 12 percent improvement from last year. After subtracting commissions paid to Yahoo’s advertising partners, revenue stood at $1.28 billion – nearly $40 million above the average analyst estimate, according to Thomson Financial. Investors cheered the news, released after the stock market closed. Yahoo’s stock price surged $2.43, or 9.1 percent, in after-hours trading after finishing Tuesday’s regular session at $26.69, down $1.17. The stock price still remains well below its levels in early 2006 when Yahoo shares climbed above $40. Since then, online search leader Google Inc. has pulled far ahead of Yahoo and other rivals scrambling for a piece of the estimated $45 billion market for Internet advertising. “We have a lot more work to do, but we are genuinely excited about where the company is headed,” Yang told analysts during a Tuesday conference call. SAN FRANCISCO – Yahoo Inc.’s third-quarter profit slipped less than analysts feared, raising hopes that co-founder Jerry Yang will deliver on his promise to turn around the slumping Internet powerhouse now that he has settled in as chief executive. The prospect of better times lifted Yahoo’s stock price more than 9 percent late Tuesday. The Sunnyvale-based company said it made $151.3 million during the three months ended in September. That was 5percent less than its net income of $158.5 million in the same period last year. The earnings were 11 cents per share in both periods because Yahoo bought back some of its stock during the past year in an attempt to bolster its eroding market value. The third quarter was Yang’s first as Yahoo’s CEO since Chairman Terry Semel stepped aside in mid-June under pressure from disgruntled shareholders. Yang has been working closely with Susan Decker, a longtime Yahoo executive who was promoted as part the June shakeup, to retool the company in an effort to regain some of the ground lost to Google during recent years. “To some degree, he has seemed to stabilize things,” Gartner analyst Mike McGuire said. “He answered some questions this quarter, but there will be more in another 90 days.” Investors have seemed skeptical about Yang’s comeback hopes. Before the rally in Tuesday’s extended trading, Yahoo’s stock price had fallen by 5 percent in the months since Yang became CEO. Google’s shares soared by 20 percent during the same period. After releasing disappointing second-quarter earnings in July, Yang pledged to overhaul Yahoo’s operations during a 100-day review. Yahoo has either closed or announced plans to close several services, and Yang indicated other “one-off” features were likely to be weeded out before the year is over. He didn’t provide any details but said Yahoo is trying to focus on its strengths in e-mail, sports and news while devoting less attention to things such as its music subscription service. “The Yahoo we envision today is very different from the Yahoo of a year ago,” Yang said.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img