Bartz era at Yahoo begins with quarterly loss, revenue decline
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Yahoo finished 2008 the way it started the year: struggling. But this time, it sunk even lower by posting its first quarterly loss in nearly seven years.
After the market closed, Yahoo said it had lost $303 million, or 22 cents a share, during the fourth quarter. That compared with a profit of $206 million, or 15 cents a share, in the same period a year ago. The Sunnyvale, Calif., Internet giant said revenue fell 1% to $1.81 billion.
It was Yahoo’s first money-losing quarter since the first three months of 2002, and the first time its revenue declined since the fourth quarter of 2001.
Despite the loss, Yahoo outperformed Wall Street’s lowered expectations. The financial results included one-time charges of more than $600 million to write down international assets and reduce its headcount, among other things. Excluding those charges, Yahoo earned 17 cents a share, better than the 13 cents predicted by analysts. Revenue excluding commissions paid to advertisers fell 2% to $1.38 billion, slightly better than the $1.37 billion expected by Wall Street.
It falls to Yahoo’s new CEO, Carol Bartz, to discuss for the first time the company’s dreary financial results and present her plans to turn around the company. Analysts expect Bartz to set the bar low for Yahoo in 2009.
She also will face questions about what, if any, plans Yahoo has to sell its search engine to Microsoft, which is eager to challenge Google’s dominance in online advertising. Yahoo is vulnerable to the economic downturn because it focuses on display advertising, which hasn’t fared as well as the text-based search ads that helped Google deliver an upbeat financial performance last week.
Expect more tough talk from Bartz, who seems well aware how dire the situation is. She has already imposed a wage freeze on all employees through 2009. Bartz herself is getting handsome compensation: At least $19 million in cash and stock awards during her first year.
-- Jessica Guynn