Yahoo Has 2nd Consecutive Profit
Yahoo Inc. said Wednesday that it racked up its second consecutive quarterly profit as it added customers and fee-based services, further distancing itself from the dark days of the dot-com advertising collapse.
The company also raised forecasts for the full year based on the momentum it sees in its new premium services as well as its core marketing services.
The company said it added 500,000 subscribers in the quarter, bringing its total to more than 1.5 million.
Net income for the Sunnyvale, Calif.-based Internet and media giant came in at $28.9 million, or 5 cents a share, in its fiscal third quarter, contrasted with a year-ago loss of $24.1 million, or 4 cents a share.
Revenue jumped to $248.8 million for the three months ended Sept. 30, a 50% increase over $166.1 million in the same period last year.
Even the traditional advertising sector showed a healthy increase, fueled by a 22% jump in sales for the marketing services division, which includes online ad sales.
The results beat the consensus expectations of Wall Street. Analysts surveyed by Thomson First Call had predicted earnings of 4 cents a share on revenue of $239.5 million.
“This was great,” said Thyra Zerhusen, manager of the ABN Amro/Talon Mid Cap Fund. “Advertising isn’t supposed to be doing well.” Zerhusen said about 3.8% of her fund is invested in Yahoo stock. Before the results were released, Yahoo shares rose 47 cents to close at $9.98 in Nasdaq trading. The stock rose as high as $10.55 in after-hours trading.
Chief Executive Terry Semel said the results are a strong validation of the course the company set a year ago: “We’re happy with our solid progress and believe we have a strong base for future growth.” Yahoo continues to add small and medium-sized businesses to its platform and attract more individuals as it improves its services, including offerings designed for high-speed broadband connections. Yahoo expects to benefit as customers become more accustomed to paying fees for services, Semel said.
Sales in the marketing services division rose to $147.4 million, a 22% increase from a year ago. Those results were helped by Yahoo’s partnership with Pasadena-based Overture Services Inc., which provides paid ads with its Internet search results.
Revenue from listing fees jumped 124% to $83.1 million. Revenue from transactions grew 118% to $18.3 million.
For fiscal 2002, Yahoo said it now expects revenue of $930 million to $955 million, up from its July forecast of $900 million to $940 million.
Bloomberg News was used in compiling this report.
