Yahoo Earnings Beat Street's Forecast; Shares Rise
Yahooreported quarterly earnings and revenue that beat Wall Street's expectations on Tuesday, sending its shares higher in extended-hours trading.
The Internet search giant reported first-quarter earnings excluding items of 24 cents per share, up from 17 cents a share in the year-earlier period.
Net income was $286 million, or 23 cents per share, up from $223 million, or 17 cents a share, last year.
Revenue was $1.08 billion, a 2 percent increase from $1.06 billion a year ago.
Analysts had expected the company to report earnings excluding items of 17 cents a share on $1.06 billion in revenue, according to a consensus estimate from Thomson Reuters.
After the earnings announcement, the company's shares rose 2 percent in trading after the closing bell. (Click here to see the latest quote for Yahoo.)
The results were "at the high end of our guidance range," Yahoo CEO Scott Thompson said. "We also made changes to resize the organization and establish a new leadership structure to quickly deliver the best user and advertiser experiences at scale."
Colin Gillis, an analyst with BGC Partners, said Yahoo was generating more profit from minority stakes in its investments than in its core business. He said Yahoo's income from operations was around $169 million while its earning and equity interest was about $172 million.
"So far Scott has done the right things," Gillis said. "He is bringing in some of his own people, he's taking costs out of the system. His first quarter out of the gate, he controls what he can control, which is earnings."
Yahoo said it expects net revenue in the second quarter to range between $1.03 billion and $1.14 billion.
Once one of the Web industry's pioneering companies, Yahoo has seen its growth stunted in recent years amid competition from Google and Facebook.
Thompson, the former president of PayPal who took the reins in January, announced plans earlier this month to lay off 14 percent of Yahoo's staffand to reorganize the management structure.
Investors are looking for more details of Thompson's strategic plans during Yahoo's conference call with analysts on Tuesday afternoon.