Yahoo! Goes Bananas After Stock Split

"Yahoo!'s performance surpassed even our high expectations, delivering the most successful quarter in the Company's history," said Semel. "With our products more popular than ever before, we have experienced success across our entire business, including strong growth in our fee-based and marketing services."

'Impressive'

The strong quarterly numbers were accompanied by a 2-for-1 stock split, always popular with tech-stock fans, and a boost to 2004 guidance.

"Our growth is a result of very impressive performance from our ongoing operations, leveraged further by recent acquisitions," said financial chief Susan Decker. "Looking forward, we are focused on making the appropriate investments and capital allocation decisions to help ensure sustainable, long-term growth. Due to our increased optimism about our business, we have raised our financial outlook for the full year 2004."

Decker said the company was raising estimates based on "better-than-expected results." The company's revised 2004 revenue estimate reflects 34% organic revenue growth, she said.

Indeed, the company raised its financial forecasts for the year, based in part on its recent acquisition of European comparison shopping firm Kelkoo.

Yahoo! said 2004 guidance is for net revenue of $2.41 billion to $2.52 billion, up from the January's forecast of $2.12 billion to $2.25 billion. The company projected annual operating income excluding depreciation and amortization of $890 million to $970 million, up from the prior range of $710 million to $800 million.

Second-quarter guidance is for net revenue in the range of $580 million to $615 million. Analysts have been expecting $534 million in revenue, though it's unclear how many of those estimates include Kelkoo's results. Operating income before depreciation and amortization, says Yahoo!, will come in between $210 million and $235 million, compared with the consensus of $180 million.

Answering the Call

Ratings action over the past few weeks shows Yahoo! has Wall Street's blessing as the beneficiary of a rising tide in online advertising. The gains come even as the company faces rising competition from the likes of closely held Google.

Analysts' reports going into Wednesday's earnings call indicate that Yahoo! -- whose stock has more than doubled over the past year and trades at more than 90 times estimated 2004 earnings -- still hasn't worn out its welcome on the sell side.