Yahoo Inc managed to meet all its quarterly earnings targets in the third quarter, even as it fielded offers from potential buyers and searched for a new chief executive. Yahoo, which fired former CEO Carol Bartz in early September before the end of the third quarter, posted slight decreases in net revenue and profit, but those declines were not unexpected. Yahoo shares gained roughly 3 percent to $15.98 in after hours trading on Tuesday. Profit in the third-quarter totaled $293 million, or 23 cents per share, compared with net income of $396 million, or $29 per share, in the year-ago period. It was not immediately clear whether Yahoo's third-quarter EPS was comparable with the 17 cents a share expected by analysts polled by Thomson Reuters I/B/E/S. Yahoo's net revenue -- which excludes fees paid to partner websites -- was $1.07 billion, compared with $1.12 billion at this time last year, and in line with Wall Street expectations.
Decrease in revenue?
The Sunnyvale, Ca-based Internet icon, which has struggled to revive its online advertising business, said it agreed to extend the revenue per search guarantee in its deal with Microsoft Corp through March 2013. The extension applies only to the United States and Canada, however. Yahoo said it remains fully committed to the success of the search alliance and that the extension represents an "important sign of that commitment." Microsoft, which offered to acquire Yahoo for $47.5 billion a few years ago, is weighing making another run at buying the company, either by itself or in partnership with others.
In an interview with Reuters, Yahoo interim-CEO Tim Morse said premium display advertising sales were on target for the third quarter, but that non-premium ad sales has a bit of an "underrun." Morse added that, on a year-over-year basis premium display, ads sales were up less than 5 percent and non-premium ad sales were down by a similar amount. Morse declined to provide an update on Yahoo's CEO search, saying only that "the board process was underway." The company has retained investment banking firm Allen & Co to help conduct a "strategic review" of its business. For the fourth-quarter, Yahoo projected net revenue of $1.125 billion to $1.235 billion, compared with $1.22 billion expected by analysts.