Yahoo's earnings for its second quarter came in 1 cent lower than expectations, with net income declining 19 percent and revenue a bit light as well, but the company called the quarter "strong."
Using generally accepted accounting principles, the company's net income decreased 19 percent from $161 million in the year-earlier quarter to $131 million. But excluding various charges, the Internet pioneer reported earnings of 10 cents per share, less than the.
Revenue increased 8 percent to $1.346 billion, excluding commissions called traffic acquisition costs that are paid to advertising partners. Analysts had expected $1.37 billion.
Embattled CEO Jerry Yang remains optimistic about his company's fortunes.
"Yahoo saw benefits in the second quarter from a number of the strategic initiatives that we have been delivering against, including the roll out of innovations in search and the announcement of a number of important partnerships," Yang said in a statement accompanying the financial results. "We are seeing validation that we have the right strategy as we continue to make transformational investments that position us to take advantage of pivotal trends driving growth on the Internet."
The Sunnyvale, Calif.-based company is in the midst of tremendous changes: a slowing economy, nearly half a year spent fending off Microsoft's attempt to acquire Yahoo, a deal under which, a and , and . Despite the turmoil, .
It's not a terribly auspicious environment.for its financial results because its profit, though not its revenue, was lower than analysts expected. Google had words of caution about the overall economy hurting its advertising business, though not actually much evidence besides some reduced spending in the real estate sector.
Wall Street seemed more partial to Yang's sunny view. In after-hours trading, Yahoo stock rose 36 cents, or 2 percent, to $21.76, erasing most of the 27-cent drop from earlier in the day before the market closed.
Update 1:52 p.m. PDT: Chief Financial Officer Blake Jorgensen had a little pat on the back for the company's performance in a slowing economy.
"Despite a difficult economic environment, we posted solid results in line with the ranges we indicated in April...Our diverse advertiser base and compelling value proposition for our customers were key factors behind Yahoo's strong second-quarter performance," Jorgensen said. Revenue measured with generally accepted accounting principles was $1.8 billion, and "operating cash flow on a normalized basis (was) $449 million," he said.
The company forecast gross revenue of $1.78 billion to $1.98 billion for the third quarter and operating cash flow of $405 million to $465 million, excluding costs associated with Microsoft's attempt to acquire Yahoo