Macroeconomic Weakness Blamed for Yahoo Q4 Revenue Slippage
Yahoo (NASDAQ:YHOO) delivered disappointing fourth quarter reports that showed slight net revenue and profit drops. The company is also in transition as new CEO Scott Thompson takes over this month in the face of the sudden resignation of the company’s co-founder Jerry Yang. However, investors seemed to forgive this on Tuesday, as shares were up in after-hours trading.
Earnings per share in both fourth quarters 2010 and 2011 were 24 cents, though with net income $312 million in the earlier year compared to $296 million in the latter; 24 cents was the consensus forecast for Q4 2011 as well. In the same 2011 quarter, net revenue (excluding fees shared with Yahoo web partners) was reported as about $1.17 billion, some $35 million less then the corresponding quarter in 2010. Projections of net revenue for the first quarter of 2012 range between $1.025 billion and $1.105 billion.
Yahoo’s main source of revenue is from display ads. In the recent fourth quarter, this amounted to $612 million; search ad revenue was $465 million, which includes $48 million from its partnership with Microsoft (NASDAQ:MSFT). These figures represent a year to year decline, which Tim Morse, Yahoo’s chief financial officer, attributed to “macroeconomic weakness”, especially in the European markets.