Yahoo reported profit that exceeded analysts' estimates, bolstering the turnaround effort that started today under newly hired CEO Marissa Mayer.
Yahoo Profit Beats Estimates as Mayer Begins as Chief Executive
Second-quarter earnings, excluding some items, were 27 cents a share, beating the 23 cent average estimate compiled by Bloomberg. Net income attributable to the company fell to $226.6 million, or 18 cents a share, from $237 million, or 18 cents, a year earlier.
Investors will look to Ms. Mayer, the fifth CEO in three years, to boost revenue and fend off competition for users and advertisers from Facebook and Google, her former employer. Yahoo's share of U.S. spending on display ads is expected to fall to 9.1% this year from 11% in 2011, trailing Google and Facebook, according to eMarketer.
"She's inheriting a tremendous position," said Ron Josey, an analyst at ThinkEquity in New York, who rates the stock a hold. "It is possible for Yahoo to turn this around?"
Second-quarter revenue, excluding sales passed on to partner sites, was little changed at $1.08 billion, Sunnyvale, Calif.-based Yahoo said in a statement today. That compares with the $1.1 billion average analysts' projection compiled by Bloomberg.
Yahoo was little changed in extended trading, and the shares fell 0.3% to $15.60 at the close in New York. The stock has dropped 3.3% this year.
Ms. Mayer, a 13-year Google veteran, takes the helm at Yahoo today. She replaces Ross Levinsohn, who ran the company on an interim basis after Scott Thompson resigned in May over inaccuracies in his resume. Thompson took over in January from Tim Morse, who became interim CEO in September. Morse followed Carol Bartz, who was fired last year.
Yahoo's overall sales tumbled 21 percent to $4.98 billion last year as users devoted less time on the service. Visitors on average spent less than two hours, 20 minutes on Yahoo pages in May, compared with more than six hours for Facebook, according to ComScore.
Ms. Mayer, who joined Google as its 20th employee and its first female engineer, is credited with maintaining the company's spartan home page for a decade and overseeing such products as Gmail, Google News, and image, book and product search. In 2010, she became VP of local, maps and location services.
She also brings technical prowess to the CEO position. She's an engineer and patent holder who earned a bachelor's degree in symbolic systems and a master's degree in computer science from Stanford University.
-- Bloomberg News --