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Yahoo! beats 1Q estimates
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April 7, 1999: 6:43 p.m. ET
Leading Web portal's revenues nearly triple, shares jump after hours
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NEW YORK (CNNfn) - Yahoo! Inc. Wednesday reported better-than-expected first-quarter operating earnings as revenue nearly tripled at the leading Web portal.
The Santa Clara, Calif.-based company posted a pro forma profit of $25.1 million, or 11 cents per share, on $86.1 million in revenue. Analysts polled by First Call expected Yahoo! (YHOO) to log a profit of 8 cents per share for the quarter.
Those results do not include amortization of assets and a one-time charge for research and development. Including those items, Yahoo! posted a profit of $16.4 million, or 7 cents per share.
Yahoo!'s earnings easily beat its year-ago results, when it earned $3.3 million, or 2 cents per share, on $30.6 million in revenue.
"We continue to see strong organic growth across our global network of media properties," said Tim Koogle, Yahoo! chairman and chief executive officer.
Yahoo! shares surge after hours
News of the profit sent shares of Yahoo! surging to 212 in after-hours trade from the New York close of 208-7/16.
Though investors had exhibited some trepidation ahead of Yahoo!'s earnings, Bob Walberg, technology analyst at briefing.com, said Yahoo!'s strong showing should boost enthusiasm in technology stocks in Thursday trade.
"From the fourth quarter to the first quarter in the last two or three years, Yahoo! has been sequentially flat," Walberg said. "To see a [13-percent] sequential jump in revenue is very strong. We think Yahoo! is executing very well."
"This is going to be your confirmation that things in the Internet are stronger than ever and this could set the stage for not just the Internet stocks tomorrow but for the market as a whole," added Gary Kaminky, Internet analyst at SG Cowen.
E-commerce revenues grow
Yahoo! continues to derive more revenue from its electronic-commerce partners. Koogle said revenue from premier merchants on the Yahoo! Shopping site represented 30 percent of the firm's total revenue, compared with 25 percent in the fourth quarter.
Yahoo! added 1,100 new stores to its Shopping site during the quarter.
The number of advertisers on Yahoo!'s site, however, fell to 2,125 from 2,225 in the fourth quarter. But Jeffrey Mallett, Yahoo! president and chief operating officer, noted that 99 of its top 100 advertisers renewed their contracts.
Expanding its reach
Yahoo!, which had been noted for its conservative approach to acquisitions, has undertaken two major mergers already this year, a sign that the company intends to expand its reach beyond conventional portal offerings.
Last week, Yahoo! announced plans to acquire Web-based audio and video broadcaster Broadcast.com Inc. (BCST) for $5.7 billion in stock.
Earlier this year, the firm set an agreement with Web community GeoCities (GCTY) in a deal worth $3.6 billion in stock at the time.
Those acquisitions were not reflected in Yahoo!'s first-quarter results, but the company expects the Broadcast.com acquisition to hurt its earnings until the second half of 2000.
Koogle said Yahoo! expects to close the GeoCities acquisition in May, while the Broadcast.com deal should close in the third quarter. He also noted that GeoCities would be integrated into Yahoo!'s operations while Broadcast.com would continue to operate as a separate unit.
GeoCities reports 1Q loss
Separately, GeoCities reported a smaller-than-expected first-quarter operating loss. During the quarter, the firm posted a loss of $6.9 million, or 21 cents a share, on revenue of $7.8 million.
Analysts polled by First Call expected First Call to report a loss of 24 cents a share.
GeoCities' first-quarter figures do not include amortization effects and a one-time charge. Including those items, the company lost $10 million, or 31 cents a share.
In the year-ago quarter, GeoCities reported an operating loss of $2.9 million, or 12 cents a share, on $2.2 million in revenue. 
-- by staff writer John Frederick Moore
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