Yahoo (NSDQ: YHOO) continues to cut costs — and that’s significantly benefiting the company’s bottom line. The company, which laid off roughly 750 employees during the quarter, including about 150 today, reported a better-than-expected increase in profits over the last three months, posting a 104 percent surge in net income. Total sales also came in slightly ahead of expectations, as Yahoo benefited from a 14 percent increase in sales of display ads.
Overall, the company reported net sales of $1.205 billion, down four percent compared to the same period a year ago. That marked Yahoo’s ninth consecutive quarter of declining net revenue. On average, though, analysts had expected sales of only $1.19 billion. As for earnings per share, it came in at 24 cents, above the consensus estimate of 22 cents.
Yahoo’s display ad sales increased 14 percent to $635 million, up from $560 million during the fourth quarter a year ago and above the 11 percent increase most analysts had expected. Search-ad sales plummeted 27 percent, although that drop was partly attributed to the cut of sales that Yahoo is now handing over to Microsoft (NSDQ: MSFT) as part of its search deal with that company.
Looking ahead, though, the company said it expects net sales of between $1.02 billion and $1.08 billion during the first quarter of the year. That was below the $1.13 billion analysts on average had been expecting — and the company’s stock has dropped more than three percent in after-hours trading. We should get more color on the company’s results during its earnings call, which starts at 2 p.m. PT.