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20 Jul 2005 10:38
Internet giant Yahoo said on Tuesday its second-quarter profit grew sixfold from a year ago to $755-million, lifted by increased sales across a broad range of services and a one-time gain.
That compared with a net profit of $113-million in the same period a year ago.
But a big chunk of the increase was a one-time gain of $563-million from the sale of what the company called a “non-strategic investment”.
Company officials gave no details on the sale in a conference call.
Excluding the one-time gain, the profit amounted to 13 cents per share, in line with analyst forecasts for the company.
Revenues grew 50% from the same period last year to $1,25-billion, lifted by growth from advertising, fees and partnerships.
“Yahoo continued to see solid growth in the second quarter as a result of our strength in both search marketing and brand advertising, increased engagement from our large, global audience, and our ability to execute and perform according to plan,” said Terry Semel, chairperson and chief executive officer.
“We have a healthy business model that we believe will enable us to take advantage of future growth opportunities and we remain dedicated to providing our users with the very best services on the internet.”
But shares of Yahoo dropped nearly 10% in after-hours action on Tuesday because its revenue and outlook fell short of expectations.
Yahoo shares dropped $3,63 to $34,10 in late trading after the report.
Excluding the cost Yahoo pays to web distribution partners, revenue grew to $875-million, up 44% but below Wall Street expectations of $881-million.
Going forward, Yahoo expects to generate sales between $880-million and $930-million in the third quarter, on the low end of analyst forecasts.
Yahoo said that in the past quarter, US revenues rose 39% to $870-million while international revenues jumped 84% to $383-million.
Operating income from the US amounted to $291-million, up 47%, while non-US operating income doubled to $77-million.
“We are very pleased with our second quarter results as they clearly underscore two fundamental business model strengths: excellent growth and great balance,” said Susan Decker, chief financial officer.
“We see this as a terrific combination leading to the quarter’s strong organic revenue growth, robust profitability, and substantial free cash flow.” - Sapa-AFP
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