Yahoo! (YHOO) did not do well in the first quarter, but it did not do as badly as feared.
EPS for the period were $.08, which is what the market expected. The portal company had revenue of $1.58 billion for the first quarter of the year, a decrease of 13% from the same period a year ago. Net income fell 78% to $118 million, but the firm’s operating cash flow was off only 6% to $409 million.
And, the market heard one thing that it considered important. Yahoo! will fire 5% of its staff to bring down costs, a move that may be essential to keep margins reasonable in the quarters ahead.
The second quarter is forecast to be gloomy. Yahoo! forecast revenue in the range of $1.43 billion to $1.63 billion. Operating income is expected to fall all the way to the range of $80 million to $90 million. A little slip and the firm will only break even.
The market was unimpressed by all of it and the stock was flat after hours.
Douglas A. McIntyre
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