No one expected the first earnings release from new Yahoo (NSDQ: YHOO) CEO Carol Bartz to be dotted with smiley faces but they didn’t expect a loss, either. Between one-time charges, the down ad market and various other factors, the company reported a Q4 loss of $303 million, or 22 cents per share, compared with a profit of $206 million, or 15 cents per share, in Q407. The revenue numbers show just how narrow the divide is between profit and loss, increase and decrease—and how quickly a company teetering on the edge can disappoint. Revenue dropped one percent, to $1.806 billion, compared with $1.832 billion in the Q407 quarter. Excluding traffic acquisition costs (TAC), Yahoo’s revenue dropped 2 percent—to $1.375 billion from $1.4 billion the previous year. Analysts who responded to FactSet Research were expecting earnings of 13 cents a share on revenue on net revenue of $1.37 billion. They were disappointed and others are likely to be as well.

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Yes, as David Kaplan pointed out in his earnings preview, these results came in during Jerry Yang’s last swan song quarter as CEO. But this suggests that Bartz has a tougher job ahead of her than even the naysayers might have expected. Her kick-ass tone during her brief intro call struck the right note but people will be listening for substance in today’s call. More to come.

Earnings release | Webcast | Slides | Financials | Transcript (via Seeking Alpha)

Update: By one perspective, Yahoo beat expectations. If you exclude the restructuring charges of $108 million, the $488 million goodwill writedown for international and $7 million in fees for outside advisors related to Microsoft (NSDQ: MSFT) proposals and other issues, Yahoo says it would have reported a profit of $238 million for Q4, or 17 cents per share—higher than the 13 cents per share expected by FactSet.