Filed at 5:14 p.m. ET
SAN JOSE, Calif. (AP) -- Internet bellwether Yahoo! Inc. reported its first quarterly profit since 2000 and beat Wall Street expectations Wednesday, saying its plan to reduce reliance on advertising is paying off.
Yahoo also raised revenue targets for the rest of the year, which could hearten analysts who were looking closely for signs that Yahoo's turnaround is on track -- and for insights into the overall health of Internet advertising, which has been slumping for two years.
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In the three months ended June 30, Yahoo earned $21.4 million, or 3 cents a share -- a marked improvement from the same period last year, when Yahoo lost $48.5 million, or 9 cents a share.
The results ended Yahoo's streak of six consecutive money-losing quarters, and chief executive Terry Semel predicted ``profitable growth through the remainder of the year.''
Revenue was $225.8 million in the second quarter, up 24 percent from $182.2 million a year ago.
Analysts surveyed by Thomson Financial/First Call were expecting to see a profit of 2 cents per share on revenue of $215.1 million.
In a sign of how Yahoo has altered its business model -- to seek more income from subscription-based services and fee-based transactions than from ads -- revenue jumped even though ad sales slipped 4 percent. The gain in fee-based revenue came largely from Yahoo's acquisition of HotJobs, a career-placement site.
Yahoo shares fell 51 cents to close at $12.19 on the Nasdaq Stock Market before the earnings report, down 31 percent for the year. But the stock jumped to $12.47 early in the extended trading session.
Yahoo's chief financial officer, Susan Decker, said revenue in the current third quarter is expected to be between $225 million and $250 million, essentially in line with Wall Street estimates of $233 million. For the full year, Yahoo expects between $900 million and $940 million, ahead of analysts' projections of $900 million.
Sunnyvale-based Yahoo said its worldwide Web sites now have 238 million registered users, up from 200 million a year ago. About 83 million of them are considered active users, up from 61 million a year ago.
In the first half of 2002, Yahoo showed a net loss of $32.3 million, or 5 cents a share, on revenue of $418.5 million. In the comparable period last year, the company lost $60.0 million, 11 cents a share, on sales of $362.4 million.
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