Yahoo to cut 1,500 workers
Company's Q3 profit off 64%; stock near 5 1/2-year lowYahoo will lay off at least 1,500 people in the next few months.
The announcement came Tuesday as the company reported quarterly earnings that reveal its growth has slowed to a crawl.
Performing better was Apple, which also reported quarterly earnings on Tuesday and even offered up CEO Steve Jobs -- a rarity -- during a conference call with analysts.
Apple reported record iPhone and Mac sales for its fiscal fourth-quarter, as well as record quarterly profits and revenue. However, the company said it can't gauge the potential hit from an economic downturn, leaving it to provide a broad guidance range for the current quarter.
More dire was Yahoo's pronouncement that it will lay off at least 10% of its staff before year's end as it tries to slice more than $400 million out of its $3.9 billion in annualized costs.
Yahoo earned $54.3 million in the third quarter, 64% lower than a year ago. Revenue rose just 1% to $1.79 billion. Excluding traffic acquisitions costs, revenue rose 3% to $1.33 billion, missing analyst expectations.
CEO Jerry Yang said advertisers "are guarding budgets carefully," noting that display ads are weak in the U.S. for certain industries and are weak overall in Europe and Asia.
Search ads, though, still appear healthy.
Yahoo president Sue Decker bragged that global page views rose 17% year-over-year and that the Olympic Games, U.S. election and worldwide economic woes drove Internet surfers online for news and video.
Yahoo shares have suffered tremendously since Yang and company dismissed a $31-per-share acquisition offer from Microsoft. On Tuesday, the stock was down 6% to $12.07, but it rose as much as 9% in after-hours trading.
As for Apple, its fiscal fourth-quarter profit of $1.14 billion meant a 16% increase over the year-ago period. Revenue rose 27% to $7.9 billion.
Apple sold nearly 6.9 million iPhones -- more than the 6.1 million sold in all previous periods combined. Apple also sold nearly 11.1 million iPods, up 8% and a record for a non-holiday quarter, and shipped more than 2.6 million Mac computers, up 21%.
"Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone -- we sold more phones than (Blackberry developer) RIM," Jobs said.
The surprise appearance of Jobs on the earnings conference call signaled that the CEO remains healthy despite rumors to the contrary and seemed to juice the stock. Apple shares that sunk 7% Tuesday jumped as much as 13% in after-hours trading.
"We don't yet know how this economic downturn will affect Apple. But we're armed with the strongest product line in our history," Jobs told the analysts.
He suggested Apple customers are more likely "to delay (purchases) rather than switch" to competing products in a tough economy. "We'll be fine and stronger than ever when the waters calm," Jobs said.
Jobs also highlighted that Apple has $25 billion of cash and no debt, positioning it well in the continuing financial crisis and credit crunch. He wouldn't comment on whether Apple could make acquisitions, but said "there's going to be some significant opportunities."
CFO Peter Oppenheimer said "visibility is low and forecasting is challenging," leading the firm to provide a wide guidance range for the current quarter. Apple targets revenue of $9 billion-$10 billion and earnings per share of $1.06-$1.35.
Paul Bond reported from Los Angeles; Georg Szalai reported from New York.