Yahoo beats Q1 forecasts thanks to paid services

IDG News Service - Yahoo Inc. reported first-quarter 2003 earnings yesterday that were above expectations as the Internet company continued to drum up revenue from its growing paid services.
Sunnyvale, Calif.-based Yahoo reported earnings per share of 8 cents on revenue of $283 million for the quarter that ended March 31, compared with a loss of 9 cents per share on revenue of $192.7 million for the same period last year. The revenue figure represented a 47% increase over the first quarter of last year.
Analysts polled by Thomson Financial/First Call predicted earnings of 6 cents per share on revenue of $273.7 million for the quarter.
The company even topped its own forecasts, given that it had predicted upon release of its fourth-quarter 2002 results that revenue for the first quarter would come in at $255 million to $275 million.
Net income came in at $46.7 million, compared with a net loss of $53.6 million for the year-ago quarter.
"We've made tremendous progress in the first quarter," Yahoo Chairman and CEO Terry Semel said during a conference call to discuss the results. Semel pinned the progress on a 38% increase in revenue from marketing services and 61% growth in income from fee-based services compared with the same period last year.
Fee-based offerings, including the Digital Subscriber Line and dial-up services offered through the company's alliance with SBC Communications Inc., brought in $63.7 million during the quarter. "We've seen strong, balanced performances, and we are laser-focused on maintaining growth," Semel said.
The results come on the heels of some significant launches during the quarter, including a premium audio and video service and a music subscription service. In addition, a new Yahoo Search tool was unveiled just this week.
The company hopes that its search service, along with its other new offerings, will allow it to further diversify its revenue stream and build upon existing moneymakers such as its classified listings, personals service and premium mail offerings.
Given the strong first-quarter performance, the company raised its full-year 2003 revenue target, predicting that it would bring in $1.22 billion to $1.28 billion.