Yahoo profits disappoint Wall Street, shares drop
Yahoo Inc. yesterday reported revenues were up more than a third in the fourth quarter, but its profits failed to meet Wall Street expectations and shares fell in after-hours trading.
The Sunnyvale, Calif., entertainment portal said net income for the quarter ended Dec. 31 was $683 million, or 46 cents a share, compared with $373 million, or 25 cents a share, during the same period a year ago. Revenues were up 39 percent to $1.5 billion from $1.1 billion a year ago.
However, adjusted net income, which excludes certain costs and gains, was $247 million, or 16 cents a share, which fell below Wall Street analysts' median estimate of 17 cents a share, according to Thomson Financial. Yahoo reported earnings after the U.S. markets closed, but the company's shares fell 11 percent to $35.73 in after-hours trading.
Yahoo's revenues benefited from the growing demand for online adverting. The company said revenues from marketing services was up 39 percent to $1.3 billion from $943 million a year ago.
For the full year, Yahoo reported a 47 percent increase in revenues to $5.3 billion from $3.6 billion in 2004. Net income for the year was $1.9 billion, or $1.28 a share, compared with $840 million, or 58 cents a share, the previous year. Adjusted net income increased to $854 million, or 58 cents a share, from $525 million, or 36 cents a share, in 2004.
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