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Yahoo beats profit expectations but ad sales still sagSUNNYVALE, Jul 16, 2013 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- On her first anniversary as chief executive of Yahoo (YHOO), Marissa Mayer delivered a mixed earnings report Tuesday that showed the company's core advertising business is still sagging even as overseas investments helped drive up quarterly profits. New products and an increase in mobile apps and video programming will help the company grow, Mayer told analysts -- but not yet, according to numbers released Tuesday. Yahoo earned $331 million in profit on $1.14 billion in sales, or $1.07 billion in net revenue after subtracting advertising partner commissions for the quarter ending June 30. Profit was up 46 percent from a year ago, buoyed by returns from Yahoo's stake in the high-flying Chinese Internet firm Alibaba. But net revenue declined 1 percent. Revenue from display advertising, the company's biggest business, fell for the third quarter in a row. Display ad sales were down 11 percent to $423 million excluding commissions, although revenue from search-related ads -- a separate category -- rose 5 percent to $403 million minus commissions. Yahoo has "a lot of work to do," Mayer conceded to analysts, but she struck an upbeat tone in describing what she called a renewed sense of energy at the struggling Internet company. She also promised to improve Yahoo's automated ad-buying programs, which analysts say is needed to compete with Google (GOOG) and Facebook in delivering targeted messages to consumers. In an unusual experiment, Yahoo streamed Mayer's presentation in a live Internet video, which showed her and Chief Financial Officer Ken Goldman behind the kind of desk favored by television news anchors. At one point Mayer displayed a chart that showed a rise in Yahoo visitor traffic, but the company declined to release specific numbers. Based on its performance in the first half of 2013, Goldman said Yahoo is lowering its full-year projections. It now expects net revenue between $4.45 billion and $4.55 billion, instead of between $4.5 billion to $4.6 billion. "We have a lot of confidence in our business but that has yet to translate to revenue growth," he acknowledged. As she has in earlier presentations, however, Mayer asserted that Yahoo will attract more users by developing new products, "which will be noticed by advertisers and can ultimately translate into revenue." Yahoo's earnings amounted to 30 cents a share. Wall Street analysts had projected earnings of 26 cents a share on net revenue of $1.08 billion, but most had said their expectations for the quarter were low. "We think the situation for Yahoo is still best summed up as a 'walk before you run' story, regarding renewed revenue growth," said Wedge Partners analyst Martin Pyykkonen in a recent report. Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/BrandonBailey ___ (c)2013 the San Jose Mercury News (San Jose, Calif.) Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com Distributed by MCT Information Services |