Yahoo Predicts Weaker Results Going Forward, but "Remains Optimistic" (BoomTown Less So)
Weaker results? Check.
Guidance going forward weaker still? Check.
Economy sucks? Double check!
Nonetheless, Yahoo CEO Jerry Yang said he “remained optimistic” about Yahoo and was going to “get fit” and power through its obvious troubles.
Get this guy over to the McCain campaign, pronto!
Actually, Yahoo’s news was just a bit more promising than the polls are going for the Republican Presidential candidate.
And, more to the point, it was not unexpected by analysts, all of whom were always expecting the worst.
Yahoo’s net income, for example, dropped 64 percent to $54 million or four cents a share, compared with $151 million or 11 cents in the same period a year ago.
Revenue at the Sunnyvale, Calif.-based Yahoo (YHOO) was $1.78 billion, slightly up from the $1.76 billion from last year’s third quarter.
In other words, bad but not the worst. That’s to come, apparently, as Yahoo execs also warned of a tougher outlook for the months ahead, in the advertising and other business arenas it competes in.
Already, they said, business was bad, most especially in Europe and Asia, although the U.S. started to weaken at the end of the quarter.
But, said Yahoo President Sue Decker, Yahoo was ready to “weather the storm,” and CFO Blake Jorgensen noted the company had plenty of cash on hand.
And page views were up, as well as search queries and revenue per search, which is good news amid the bad.
As reported here previously, Yahoo also confirmed it would cut it workforce by “at least” 10 percent of its global workforce–or about 1,400 to 1,500–and cut other costs too.
Said Yang in a separate memo to staff about the layoffs (yes, that is the punctuation he used):
“today as part of our q3 earnings release, we said that our goal is to reduce our current annualized cost run rate of roughly $3.9 billion by more than $400 million before the end of 2008. we are targeting non-headcount expenses wherever possible, such as facilities and outside services. however, because compensation expenses are the single largest part of our costs, we anticipate a reduction of at least 10% of our global workforce by year-end.”
Said Yahoo’s Yang in an overall statement in its full press release about its earnings (you can read that here, by the way):
“As economic conditions and on-line advertising softened in the third quarter, we remained highly focused on our 2008 strategy to invest in initiatives that enhance not only our long term competitiveness, but also our ability to deliver for users and advertisers in this more difficult climate. We have been disciplined about balancing investments with cost management all year, and have now set in motion initiatives to reduce costs and enhance productivity. The steps we are taking this quarter should deliver not only near-term benefits to operating cash flow, but should also substantially enhance the nimbleness and flexibility with which we compete over the long term. We enter this slowing market with competitive advantages as the destination of choice for consumers and a leader in providing online advertisers with the broadest set of advertising management tools and products in the industry. We plan to continue building on those strengths.”
Yahoo stock, dragging for weeks in the $12 a share range, rose to $13.05 in after-hours trading, up 98 cents or about 8 percent.