The chief financial officer of Internet media company Yahoo! expressed confidence in the company's new online advertising system Panama, despite investors' disappointment with the Internet media company's first-quarter earnings report.
Chief Financial Officer Susan Decker told CNBC the company remains comfortable with the Web advertising system due to the positive customer response seen in the first quarter.
"It was never our expectation it would contribute financially in its first few weeks of operation," said Decker said, in an appearance on CNBC on Wednesday.
Yahoo announced late Tuesday that quarterly earnings fell 11%, missing Wall Street estimates.
Shares fell greater than 10% on Wednesday as investors also expressed concern that Yahoo would not soon close the gap with Web search leader Google .
"In the months and quarters ahead it will be very clear how to separate the wheat from the chaff what we had in yesterday's announcement," Decker added. "I think the chaff is sort of the hype and speculation about how quickly Panama would contribute to financial results."
Decker said the company feels "very good" about its position relative to competitors such as Google.
"In search, I don't think we have felt any better about our competitive position since we've been in the business, based on what we introduced and how it performed in the marketplace," she said. "In the display business we have a market-leading position."
Some analysts were disappointed by branded advertising revenue, which encompasses things such as banner ads.
"The biggest driver of disappointing results ... is the continued deceleration in branded advertising," Goldman Sachs analyst Anthony Noto said in a report. "Yahoo's financial success needs to exceed the high-end of company guidance and heightened investor expectations in order to achieve a favorable return for investors."
Merrill Lynch analyst Justin Post said the results "could be considered disappointing due to very positive comments made by management to advertisers on early Panama results and deceleration of branded advertising growth to 20%."
Yahoo forecast second-quarter revenue, excluding affiliate payments, of $1.2 billion to $1.3 billion. Analysts' forecasts fell within a range of $1.22 billion to $1.35 billion.
"We introduced our Q2 outlook for the first time yesterday, which is very consistent with what our plan has been for the last three to four months," Decker told CNBC. "As far as we're concerned, we're executing according to plan. We introduced the system to create value for advertisers and publishers over the next 10 years, and our early indications are very, very encouraging to us."
Yahoo's first-quarter report, announced on Tuesday after the close, showed an 11% decline in first-quarter earnings.
Net income fell to 10 cents a share, compared with year-ago earnings of 11 cents. Wall Street was forecasting earnings of 11 cents a share. Revenue rose 9% to $1.18 billion.
The company previously cautioned that the first quarter would be the slowest-growing period of the current year. The consensus revenue prediction, excluding traffic acquisition costs, was $1.21 billion.
Prior to the earnings report, the stock was seeing year-to-date gains of 25%.