Hammered by a weak online advertising market, Yahoo (NSDQ: YHOO) reported steep drops in net income and revenue during the first quarter and, as expected, announced another wave of layoffs — this time, five percent of its workforce.
Results were largely in line with expectations. The company posted net income of $118 million ($0.08 per share), down 78 percent from the $537 million ($0.11 per share) recorded during the same period a year ago. Revenue for the company’s first fiscal quarter dropped 13 percent to $1.58 billion, from $1.8 billion a year ago. On average, analysts had expected earnings per share of $0.08 cents and revenue of $1.63 billion.
As of March 31, Yahoo had 13,500 employees — so the latest round of layoffs could mean that as many as 675 Yahoo employees will lose their jobs.
– Revenues from owned and operated sites: Yahoo said that a three percent decrease in search advertising and a 13 percent decrease in display advertising led revenue at its own sites to drop 10 percent to $872 million. Analysts on average had expected a 17 percent drop in display revenue and a one percent drop in search revenue.
– Revenue from affiliate sites: Revenue from affiliated sites dropped 16 percent to $511 million, compared to the same period a year ago.
– One-time revenue hits: Yahoo said that its revenue had also been negatively impacted by the sale of Kelkoo and lower fees revenues from broadband partnerships, VOIP services and subscription music offerings.
– More cuts ahead?: In addition to laying off five percent of its workforce, the company also said it would “continue to implement non-headcount cost reductions.”