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Yahoo! Profit triples, sales drop

21 October 2009 08:43 (UTC +04:00)

BakÄ± â€“ APA. Yahoo Inc. said late Tuesday that its third-quarter profit more than tripled as it clamped down on costs, sold an interest in a Chinese Internet retailer and benefited from a smaller-than-expected decline in the sale of online display advertising, MarketWatch reported.
Sunnyvale, Calif.-based Yahoo said net income for the quarter ended in September rose to $187 million, or 13 cents a share, from $54.3 million, or 4 cents a share, in the same period last year. Net revenue was $1.13 billion.
Analysts polled by Thomson Reuters had estimated Yahoo would post third-quarter earnings of 7 cents a share, and $1.12 billion in net revenue.
"We had a solid third quarter that signals our major businesses have stabilized," Yahoo Chief Executive Carol Bartz said in a prepared statement.
Shares of Yahoo rose more than 5% to $18.04 in late trading, following the earnings report.
Yahoo said it cut operating expenses to $775 million in the third quarter, compared to $944 million in the period last year.
The cost cuts came as Yahoo hired 200 people in the period, largely in sales and product development. In addition, the company spent some $18 million on an ongoing advertising campaign.
Yahoo also recorded a $98 million gain in the quarter from the sale of its stake in Chinese online business-to-business retail site Alibaba.com. Yahoo has retained a valuable, nearly 40% stake in Alibaba.com parent Alibaba Group.
The Wall Street Journal reported Tuesday that Yahoo has hired former General Electric Co. executive Andrew Siegel to evaluate the sale of businesses, though it didn’t provide details on which deals might be under consideration.
Yahoo relies heavily on the sale of online display advertising, which has been hit relatively hard by the spending downturn compared to cheaper, text-based Internet search advertising.
Yahoo said display advertising on its network of Web sites fell 8% in the third quarter compared to the same period last year.