Yahoo (NSDQ: YHOO) reported revenues of $1.8 billion for Q407, up 8 percent compared with $1.7 billion in the same quarter last year. The company earned net income of $206 million, or $0.15 per share, down from $269 million, or $0.19 per share in Q406 but higher than the $0.11 some analysts expected. That could have worked in the company’s favor — if guidance for 2008 hadn’t come in lower than anticipated. It’s also a 23 percent drop in profit, but, as noted, better than expected. Add to that a lack so far of restructuring details being demanded by some vocal critics. The result: Yahoo shares are getting smacked in after-hours trading, down 8 percent in the first hour after tjhe announcement. (The company finally provided some details: 1,000 jobs will be cut in but in a targeted manner, not across the board, and accompanied by continued investment.)
Other financial highlights:
– Marketing services revenue from owned and operated Yahoo sites grew 21 percent to $1.03 billion.
– Revenues ex-traffic acquisition costs (TAC) grew 14 percent to $213 million.
– International segment revenue fell 7 percent to $519 million, while US revenue grew 15 percent to $1.31 billion.
– On a sequential basis, revenue was up 12 percent, due to 12 percent growth in Yahoo owned-and-operated sites.
AT&T-Yahoo deal restructured: Some of the analyst and investor grumbling has been over the future of Yahoo’s deal with AT&T (NYSE: T). The companies are answering some of that today with an announcement that the relationship is shifting, starting in the second quarter, from co-branded DSL with Yahoo services to an ad-supported, revenue-sharing based att.net portal “powered by Yahoo.” More in extended entry….
The new portal will run on the My Yahoo and Yahoo Mail platforms. The companies describe this as “a new multi-year strategic alliance that paves the way for an even richer and more innovative online experience for consumers – whether at home or on the go.” The restructuring will cost Yahoo some revenue in the short term but the company insists it will be better off in the long run. Yahoo expects aggregate revenue outside of traffic acquisition costs to decline by $150-200 million over 2007 because of the restructuring; Yahoo also expects a $300-400 million upfront payment from AT&T that will be recognized over the life of the contract.
Among the changes: AT&T Yellowpages.com will supplant Yahoo Local Search, becoming the lead local search engine on PC and mobile for AT&T customers. But Yahoo will provide search and display advertising for AT&T customers on PC and mobile. More in the release.