Yahoo Profit Matches Forecasts; Firm Plans Job Cuts
Yahoo reported a profit that declined from last year but matched analysts' expectations. The Internet advertising firm also lowered its revenue outlook and said it will cut 10 percent of its workforce.
Yahoo said it garnered a profit of 9 cents a share in the third quarter, compared with earnings of 11 cents a share this time last year.
Sales for the most recent quarter came in at $1.325 billion, up from $1.283 billion last year. As is customary with Yahoo and a handful of other Internet companies, those revenue figures exclude traffic-acquisition costs.
Yahoo said it experienced weak sales as corporate advertisers slashed spending on online brand promotions.
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Analysts surveyed by Thomson Reuters expected Yahoo to report income of 9 cents per share on $1.37 billion in net revenue.
Yahoo is lowering its revenue estimates for the remainder of the year. The move reflects mounting concerns about a downturn in online ad spending as the economy unravels.
In a revision made Tuesday, the Sunnyvale-based company projected its 2008 revenue will range from $7.18 billion to $7.38 billion—down from a forecast of $7.35 billion to $7.85 billion issued three months ago.
Like most Internet companies, Yahoo relies on advertising for most of its profits. Online advertisers, though, are cutting back as they brace for what's expected to be the worst recession in a quarter-century.
The headcount purge outlined Tuesday represents a 10 percent reduction in Yahoo's payroll of about 15,000 employees.
It's the second time in nine months that Yahoo has resorted to mass layoffs in what so far has been an ineffectual effort to rebound from a financial funk that has left its stock price near a 5 1/2-year low.
Word of the layoffs helped push shares of Yahoo , which settled 6.14 percent lower at $12.07 on the Nasdaq, about 6 percent higher in late trading Tuesday.
The company employs 15,000 globally.
Yahoo shares shed 16 percent during the quarter and are down about 45 percent for the year.
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- Wire services contributed to this report.