Yahoo on Tuesday reported its fourth-quarter financial results. Despite an overall loss for the Internet giant, the earnings demonstrate Yahoo is coping with the economic crisis better than analysts predicted.
Revenues were $1.8 million for the quarter, a one percent decrease from $1.832 million for the same period in 2007. Analysts had estimated revenue of $1.37 billion on average, according to a Bloomberg survey. The operating loss for the quarter was $278 million, compared to operating income of $191 million for the same period in 2007.
“Despite the challenging economic environment, Yahoo delivered adjusted operating cash flow above the midpoint of guidance for the fourth quarter,” said CEO Carol Bartz. “The company also made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves. We have work to do, but I am excited by Yahoo’s opportunities and encouraged by the tremendous innovation and momentum I’ve seen since joining the company as CEO.”
Drilling into the Data
Yahoo offered some bright spots in its earnings report. U.S. revenues for the fourth quarter were $1.338 million, a two percent increase compared to $1.313 million for the same period in 2007. U.S. segment revenues for all of last year were $5.190 million, a 10 percent increase compared to $4.727 million in 2007.
Yahoo also saw a two percent decline in display advertising revenue. “Given the pressures of the macroeconomic environment, we were surprised that the decline in display (advertising) wasn’t greater than” two percent, Thomas Weisel Partners analyst Christa Quarles said in a note.
Yahoo CFO Blake Jorgensen said the company is encouraged by the 2008 results. “Yahoo’s aggressive cost management and strong balance sheet helped us navigate this unprecedented economic environment,” he said. “The cost-reduction initiatives and investments we made in 2008 have positioned us well…