Profit Drops by 26% for Yahoo, Lower Than Analyst’s Expectations

Yahoo Inc. (NASDAQ:YHOO), the tech ginat which is on a hunt for a new Chief Executive Officer and fielding offers from potential bidder, on Tuesday posted declines in profit and revenue in its results, however those declines were not a surprise.

Yahoo’s profit in the third quarter was $293 million compared to the net income of $396 million generated in the early period of the year, a decline of 26 percent. Yahoo’s revenue was said to be in line with expectations made by Wall Street, revenue excluding partner websites fees, which was $1.07 billion compared to last year’s $1.12 billion.

Stocks of Yahoo increased roughly 2.7 percent to $15.88. Carol A. Bartz, former chief executive was fired by Yahoo early this September. However everyone was not happy with the overall results.

An analyst at BGC partners, Colin Gillis said what he actually wants is, to see yahoo stop declining revenue and if the company generates some revenue it would be beneficial for the investors and also the company. Yahoo retained the investment banking firm Allen & company to facilitate it on conducting a business review after Mr. Bart’z was relieved of his services from the company.

Numerous potential bidders have expressed their interest of having a deal with Yahoo. Private Equity firms like Providence Equity Partners, Hellman & Friedman, Silver Lake Partners, Bain Capital, Kohlberg Kravis Roberts and the Blackstone Group are among the ones who are fortunate to get a look of the limited economic data that the advisors of Yahoo will be circulating. According to reports Co-operate buyers like AOL, Microsoft and the Chinese e-commerce giant Alibaba have also shown interest to have deal with Yahoo.

Despite all its struggles, Yahoo’s web pages hace received a lot of traffic and have been popular destinations, in this quarter the company’s media properties page views went up by 9 percent. However, search page views fell by 3 percent, while search queries increased by 1 percent.

The revenue per search guarantee was extended through March 2013 by Yahoo in its deal with Microsoft, however the extension is applied only to Canada and the United States. Yahoo said it was completely committed to the success of the search treaty and the extension reflected a sign of importance to the commitment.

Yahoo announced revenue of $1.120 billion to $1.230 billion in the fourth quarter, compared to the $1.22 billion which was expected by the analysts.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.