It wasn't as bad as analysts had expected, but Yahoo's third-quarter earnings report was still disappointing.
Reporting its quarterly performance to investors for the first time since CEO Carol Bartz was fired in September, company officials said earnings fell 26 percent to $239 million for the third quarter of 2011, while revenue declined 24 percent to $1.2 billion.
During a conference call with analysts, CFO and acting CEO Tim Morse tried to remain upbeat, even as he avoided answering questions about who will permanently replace Bartz.
Morse attributed the declines primarily to a change in revenue presentation related to search and revenue-sharing agreements with Microsoft.
Also read: Ousted CEO Carol Bartz: Yahoo 'F—ed Me Over'
During the conference call, Morse said that the company is restructuring its U.S. sales force, adding, "We expect to see increased efficiency and expanding growth opportunities as the new team gets fully ramped up."
Also read: How to Fix Yahoo: The Innovator’s Dilemma (Exclusive)
But he provided no specifics about a new CEO.
Three analysts raised the issue.
"The CEO search, all I can tell you is, it's under way," Morse answered. "That's the board's process, and I don't really have any comment on the board's process."
Another analyst asked Morse whether there was a timeline to replace Bartz and again Morse declined to answer.
Separately, Morse said that the company is increasing its partnerships with content providers.
"I feel great about ABC, working well with Faebook, working well with a number of video producers," he said.
He began the call by reading a prepared statement.
"We're pleased that revenue, operating income and EPS were all above consensus this quarter," he said "My focus, and that of the whole company, is to move the business forward with new technology, partnerships, products, and premium personalized content — all with an eye toward growing monetization."
Also read: Yahoo Under Siege: As Hedge-Fund Raider Closes In, Founders Hint at Sale
The company's third quarter net earnings of $293 million worked out to 23 cents a share. Non-GAAP earnings were 21 cents a share on revenue not including traffic acquisition costs of $1.072 billion — a 5 percent fall from the same period in 2010.
Wall Street expectations were for earnings of 17 cents per share on revenues of $1.07 billion.
Net earnings per diluted share fell by 21 percent over the same quarter in 2010.
Here's the company's release:
SUNNYVALE, Calif.–(BUSINESS WIRE)– Yahoo! Inc. (NASDAQ:YHOO) today reported results for the quarter ended September 30, 2011.
Revenue excluding traffic acquisition costs ("revenue ex-TAC") was $1,072 million for the third quarter of 2011, a 5 percent decrease from the third quarter of 2010. Income from operations decreased 6 percent to $177 million in the third quarter of 2011, compared to $189 million in the third quarter of 2010. The year over year decreases were primarily due to the revenue share related to the Search Agreement with Microsoft.
GAAP revenue was $1,217 million for the third quarter of 2011, a 24 percent decrease from the third quarter of 2010, primarily due to the required change in revenue presentation related to the Search Agreement and the associated revenue share with Microsoft.
Net earnings per diluted share decreased 21 percent to $0.23 in the third quarter of 2011, compared to $0.29 in the third quarter of 2010. Adjusted for the two items noted below, diluted earnings per share increased 32 percent to $0.21 in the third quarter of 2011, compared to $0.16 in the third quarter of 2010. Net earnings per diluted share for the third quarter of 2011
included a benefit of $0.02 per diluted share related to the dilution of the Company's ownership interest in Alibaba Group as a result of option exercises and the issuance of stock to Alibaba Group employees during its quarter ended June 30, 2011. Net earnings per diluted share for the third quarter of 2010 included a benefit of $0.13 per diluted share related to the gain on sale
of HotJobs.
"We're pleased that revenue, operating income and EPS were all above consensus this quarter," said Tim Morse, CFO and Interim CEO, Yahoo!. "My focus, and that of the whole company, is to move the business forward with new technology, partnerships, products, and premium personalized content — all with an eye toward growing monetization."