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Yahoo's 1st-Quarter Profit Tops Analysts' Expectations

Earnings: Internet firm's net income climbed to $4.29 million and revenue tripled to $30.2 million.

April 09, 1998|From Bloomberg News

Yahoo Inc. said Wednesday that its first-quarter earnings rose, topping expectations as the No. 1 Internet directory boosted revenue from advertising and electronic commerce.

Net income climbed to $4.29 million, or 8 cents a diluted share, contrasted with a pro forma loss of $740,000, or 2 cents, in the year-earlier period. Revenue tripled to $30.2 million, from pro forma revenue of $10.1 million.

Santa Clara-based Yahoo is turning its name and range of services into a popular brand that's luring advertisers, making it one of a handful of profitable Internet companies. Its shares have soared 45% this year amid optimism that new marketing agreements and added features will further distance it from competitors.

"They're the unquestioned leader on the Web right now in navigational services and overall content," said analyst Derek Brown of Volpe Brown Whelan & Co.

Per-share earnings exceeded 4 cents a share, the average estimate of analysts polled by IBES International Inc.

Yahoo shares rose $4 to close at $97.25 on Nasdaq. The results were released after the close of trading.

Yahoo said traffic, or the number of users on its network of Web sites, rose to a daily average of 95 million page views in March, up from 65 million in December.

A page view is a display of one electronic page of information in response to a user's request. If page views increase, a Web site can attract more advertisers.

Advertising revenue in the quarter rose to $23.6 million, from $10.1 million a year ago, Brown said. It rose 11%, from $21.3 million in the fourth quarter.

Electronic commerce revenue rose to $6.6 million, from $3.8 million in the fourth quarter, Brown said. Yahoo didn't have e-commerce revenue a year ago. E-commerce represented 22% of revenue; analysts had expected 15%.

The company's revenue growth rate, though, slowed sequentially to 20% in the quarter, down from 45% in the fourth quarter.

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