SAN FRANCISCO — Yahoo Inc. reported a $303-million shortfall Tuesday, its first quarterly loss since 2002, as the struggling Internet company took charges to acknowledge the shrinking value of its business.
Cutbacks by advertisers, especially on Web banners, hurt Yahoo's revenue, which also dropped for the first time in seven years.
Eight days into her new job, Yahoo Chief Executive Carol Bartz warned analysts during a conference call that tough times would continue. But before the presentation, as required by law, Yahoo's head of investor relations read the list of risk factors -- things that could go wrong for shareholders and depress the stock even further.
"I should have understood all those risks before I took this job," Bartz quipped.
The moment of levity was short-lived. The continued deterioration of Yahoo's business in the fourth quarter, the last under former CEO Jerry Yang's watch, made Bartz's assignment even tougher.
The Sunnyvale, Calif., company reported a net loss of $303 million, or 22 cents a share, compared with a profit of $206 million, or 15 cents, a year earlier. Revenue fell 1% to $1.81 billion.
Still, investors had braced for worse. Yahoo's stock rose more than 5% to $11.95 in after-hours trading, after closing up 1.5% to $11.34 in regular trading before the earnings report.
If not for one-time charges that covered laying off 1,500 employees last month and adjusting the shrinking value of its European operations, Yahoo would have earned 17 cents a share, beating analyst estimates of 13 cents.
Yahoo said its revenue would have risen 3% if not for currency fluctuations. Net revenue, which leaves out commissions paid to advertising partners, totaled $1.37 billion, down from $1.4 billion a year ago but matching analyst estimates.
Yahoo's outlook for the current quarter calls for revenue to decline as much as 16%. The company declined to provide a first-quarter profit forecast or guidance for the rest of the year, citing the uncertain economy.
"They are battening down the hatches for a long campaign," Sanford C. Bernstein analyst Jeffrey Lindsay said.
Yahoo weathered a difficult year that included a takeover attempt from Microsoft Corp., a proxy fight from billionaire investor Carl Icahn, the collapse of a potentially lucrative partnership with rival Google Inc. and a cratering world economy.
