Yahoo misses Q4 earnings, revenue expectations

by Juan Carlos Perez, IDG News Service, MacCentral

Yahoo Inc. fell short of Wall Street’s expectations for both earnings and revenue in its fourth quarter ended Dec. 31, 2005.

The Web portal saw revenue grow 39 percent to $1.501 billion, while net income rose to $683 million, or $0.46 per share, from $373 million or $0.25 per share, the Sunnyvale, California, company reported Tuesday.

Excluding the money that Yahoo pays to third-party affiliates of its online ad network, revenue grew 36 percent to $1.068 billion, short of the $1.070 billion consensus expectation from analysts polled by Thomson First Call. These third-party payments are commonly referred to as traffic acquisition costs (TACs).

Adjusted, or pro forma, net income, which excludes certain gains, losses and expenses, came in at $247 million, or $0.16 per share. Here, Yahoo also failed to meet analysts’ consensus expectation, which was for $0.17 per share. In 2004’s fourth quarter, pro forma net income was $187 million, or $0.13 per share.