Yahoo Beats Earnings Estimates and Stock Rises After the Closing Bell
UPDATED: Interim CEO Tim Morse tells analysts that the search for a CEO following the firing of Carol Bartz is underway and that the board's evaluation of deal options will take time.
Yahoo shares rose as much as 4 percent-plus in after-hours trading after the company reported that its third-quarter earnings topped the forecast of analysts, even though revenue and per-share profit fell from the period a year earlier.
On a conference call today to discuss its earnings, Wall Street analysts were looking to see what management had to say about its search for a permanent CEO in the wake of the firing of Carol Bartz and what clues the company would provide on whether a sale or partnership is in the works with the likes of Microsoft, AOL or even a major media conglomerate.
Yahoo's CFO and interim CFO Tim Morse on the call reiterated that the company's comprehensive strategic review was underway and that the online company's board was "actively" evaluating the "full range" of strategic options. The goal was to create value for advertisers, users, employees and shareholders, he said. But he emphasized that this would take time and didn't detail a potential timeline.
The announcement of any potential deal would come whenever a decision is reached, but "it will not be today and not on this call," he told analysts.
Asked why Bartz was pushed out of the CEO spot by the company's board of directors despite the solid business trends, Morse simply said: "The board's process is the board's process." Asked about the CEO search, he only said that it was underway, but didn't detail a timeline.
Morse on Tuesday lauded the company for beating revenue and earnings expectations for the third quarter despite slower start in July and said Yahoo has seen "encouraging progress in many areas."
Non-premium display advertising was among those areas that still need more focus and improvement, he said.
Ad trends benefited in the latest quarter from spending by TV networks ahead of the start of the fall TV season and from campaign from such companies as Viacom's Paramount Pictures, he said.
Video remains a key focus for Yahoo, which recently unveiled eight new women-targeted original video series, Morse highlighted.
Morse also lauded special events coverage as having done well on Yahoo. For example, a "9/11 Remembered" special drew more than 300 million page views and 250 million picture views, he said.
Yahoo said it earned 21 cents per share in its fiscal fourth quarter, excluding certain items, while analysts figured it would earn 17 cents. On that basis, the company earned 29 cents a year ago. Revenue fell 4 percent to $1.1 billion.
Shares of Yahoo were down 1.5 percent in regular trading to $15.47, but were rising as much as 60 cents in the after-hours session.
Yahoo on Tuesday also said that Microsoft has extended - by one year to the end of March 2013 - revenue guarantees under a search agreement the two struck a couple of year ago.
Microsoft has paid Yahoo quarterly, because its system for ad buys has not produced as much revenue as hoped. Microsoft's third-quarter payment to make up the difference amounted to $53 million. Morse said Yahoo wanted an extension to add more financial certainty for its investors.