Yahoo grows earnings and revenue in first quarter
Yahoo grew its revenue and net income and exceeded Wall Street’s expectations for both categories during its first quarter of 2008, arguably one of the closest-watched earnings reports of its history, as it tries to fend off an acquisition attempt by Microsoft.
Revenue came in at $1.818 billion, up 9 percent compared to 2007’s first quarter. Deducting the commissions paid to Web sites in its ad network, Yahoo’s revenue was $1.352 billion, a 14 percent increase and above the $1.324 billion consensus expectation from financial analysts polled by Thomson Financial.
Net income was $542 million, or $0.37 per share, compared to $142 million, or 10 cents per share, in 2007’s first quarter. That includes a net noncash gain of $401 million from Alibaba.com’s initial public offering.
Pro forma net income, which includes one-time items, was $150 million, or 11 cents per share, slightly down from net income of $154 million, or 11 cents per share, in 2007’s first quarter, but topping analysts’ consensus expectation of 9 cents per share.
Yahoo’s directors and managers have been arguing strongly against Microsoft’s acquisition bid, announced almost three months ago and now valued at around $42 billion, saying it undervalues the company and is not in investors’ best interest.
Yahoo’s management has been actively seeking alternative deals that will allow it to build a case against Microsoft’s bid, but so far hasn’t come up with anything concrete.
The first-quarter financial report and management conference call will likely be closely scrutinized and, depending on how satisfied or dissatisfied investors are with the results, the report is likely to have a significant effect on Yahoo’s tussle with Microsoft.