Yahoo (NASDAQ:YHOO) posted much better-than-expected first-quarter profits late Tuesday; however, sales fell short and ad revenues weakened, sending the Silicon Valley tech giant's shares into a tailspin in extended trade.
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The Sunnyvale, Calif.-based company, which revamped its website and halted its work-from-home policy last quarter in an aggressive move by CEO Marissa Mayer, reported net income of $287.5 million, or 35 cents a share, down from $390 million, or 35 cents a year ago.
Excluding one-time items and acquisition costs, Yahoo said it earned 38 cents a share, topping average analyst estimates of 24 cents in a Thomson Reuters poll.
Revenue for the three-month period climbed slightly to $1.14 billion from $1.2 billion. However, excluding traffic acquisition costs, sales fell 11% to $1.07 billion, missing the Street’s view of $1.1 billion.
Yahoo said cost-per-click fell roughly 7% year-over-year, excluding Korea and adjusted display revenue slumped 11%. The company’s shares skidded 4% after hours to $22.93.
The announcement comes roughly a year into Mayer's tenure as chief executive, following a revolving door on Yahoo's C-Suite over the last few years. She has been working to turn the company around, including launching a major update to Yahoo.com.
“We saw continued stability in our business, strengthened our team, and started the year with fast execution against our products and partnerships," Mayer said in a statement. "I'm confident that the improvements we`re making to our products will set up the company for long-term growth."