Follow us:

Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

April 22, 2008 at 1:47 PM

Yahoo reports Q1 ahead of expectations, sort of

The bottom line: Yahoo posted first quarter 2008 revenue, excluding traffic acquisition costs, of $1.35 billion. That’s at the higher end of the range it issued in January and reiterated in March. Earnings per share of 11 cents beat the Wall Street consensus of 9 cents per share. But that’s what everyone was expecting the company to do.

The company’s net income was helped substantially by its stake in Chinese Web giant Alibaba. It realized a net non-cash gain of $401 million related to Alibaba’s IPO. (Update: Note that the company’s earnings of 11 cents per share is already adjusted for the gain from Alibaba. If you leave Alibaba and other one-time items in, the company earned 37 cents a share.)

Yahoo’s outlook: For the full year, it is forecasting revenue of $7.2 billion to $8 billion, unchanged from its January forecast, and operating income of $1.775 billion to $2.025 billion, before depreciation, amortization, and stock-based compensation expense. That range is up $50 million from its previous forecast.

These results are basically as expected and will likely do little to sway Microsoft to raise its bid for Yahoo, as CEO Steve Ballmer said earlier today.

Microsoft’s offer, at the close of trading today, stood at $43 billion.

During the Yahoo conference call, which is still going on, CEO Jerry Yang addressed Microsoft’s unsolicited offer, but only reiterated — often using nearly the same language — the points his company has made since it first reject the offer in February. He said if you take only one point away from his comments, it’s that Yahoo’s board will not enter any transaction that doesn’t realize full value for Yahoo. Microsoft’s bid “substantially undervalues” the company, Yang said.

President Sue Decker addressed the company’s recent test of using Google to sell advertising next to Yahoo Internet search results. “It’s premature to speculate on what options we may ultimately pursue or whether some form of arrangement with Google might result,” she said.

Among the other interesting details in Yahoo’s earnings release, available here, is this line about the drag Microsoft’s acquisition offer has placed on operating income.

“Operating income for the first quarter of 2008 includes incremental costs of $14 million incurred for outside advisors related to Microsoft’s unsolicited proposal, other strategic alternatives, and related litigation defense costs.”

Comments | More in Yahoo acquisition

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►