Yahoo’s revenue and profit slid significantly in the first quarter, but the company’s performance was in line with Wall Street’s expectations and company officials said the results reflect solid execution toward its financial goals.
During the quarter ended March 31, revenue came in at US$1.21 billion, down 24% compared with 2010’s first quarter. Yahoo said the revenue drop is in part due to a change in how it recognises the part of its revenue derived from its search advertising agreement with Microsoft. That revenue isn’t reported as gross revenue, but rather as part of the net revenue left after subtracting commissions paid to advertising and other partners.
Yahoo’s net revenue was $1.06 billion, down 6% year on year but matching the consensus estimate from analysts polled by Thomson Financial.
Meanwhile, net income fell 28% to $223 million, while earnings per share dropped 23% to $0.17 per share, exceeding analysts’ consensus estimate by one penny.
“We are solidly executing toward our plan for returning Yahoo to sustainable revenue and profit growth,” said Carol Bartz, CEO of Yahoo.