Yahoo! Reports Tumbling Revenues But Meets Earnings Expectations

11 October 2001

Yahoo! posted results for the quarter ending September 30, revealing earnings in line with expectations but lower-than-anticipated revenues.

Blaming slow advertising (especially in Europe) and the September 11 attacks on the US, the portal giant reported revenues of $166 million, down from $295m last year and lower than expectations of $170.5m. Chief financial officer Susan Decker announced that marketing and ad revenues tumbled 11% to $132m, while last month’s devastation cost the group $2m–$3m of revenue during the quarter.

Pro forma earnings came in at $8.4m, but the $47.7m net income posted last year turned into a $24m net loss. For the current quarter, Yahoo! predicts EBITDA (earnings before interest, taxes, depreciation and amortization) of between $5m loss and $10m profit. Full-year EBITDA is forecast at $10m–$25m.

Decker added that the portal had been cutting expenses, down 20% from their peak, with sales and marketing costs shaved from $106m last year to $86m. However, the company is planning further reorganisation around core business areas, which could result in job losses.

On a more positive note, Yahoo!’s global online audience jumped from 166m in September last year to 210m last month, generating an average of 1.25 billion page views per day.

News source: Financial Times