Yahoo's first-quarter results soar

IDG News Service - Benefiting from an uptake in interest for its paid services and the acquisition of paid search listings provider Overture Services Inc., Web giant Yahoo Inc. yesterday reported jumps in both net income and revenue for its first quarter (download PDF).
The Sunnyvale, Calif.-based company reported net income for the period that ended March 31 of $101.2 million, or 14 cents per share, up from $46.7 million, or 8 cents per share, in the same quarter a year earlier.
Revenue for the first three months of the year soared to $757.8 million, from $282.9 million in the same period last year. Excluding traffic acquisition costs, revenue for the quarter came in at $550.2 million, the company said.
The results surpassed Yahoo's and analysts' expectations. "This is by far the most successful quarter in Yahoo's history," Yahoo Chairman and CEO Terry Semel said in a conference call.
Analysts expected Yahoo to post earnings of 11 cents per share and revenue of $501 million excluding traffic acquisition costs, according to a consensus estimate gathered by Thomson Financial/First Call.
With a solid first quarter under its belt, Yahoo revised its expectations for the year upward. The company now expects revenue excluding traffic acquisition costs to be between $2.41 billion and $2.52 billion, up from a January estimate of between $2.12 billion and $2.25 billion. The adjusted forecast includes the acquisition of European comparison-shopping Web site Kelkoo SA, announced last month, Yahoo said.
Yahoo defines revenue excluding traffic acquisition costs, or TACs, as gross profit before other costs of revenue. Namely, it excludes TACs paid to affiliates of Overture, which Yahoo acquired in October 2003. Yahoo said it provides the figure for comparison purposes, because TACs paid to the affiliates make up a significant percentage of revenue generated by Overture's sponsored search services.