This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Yahoo! Plunges as Outlook Disappoints (Update 2)

This story has been updated with additional information from Yahoo!'s conference call in the fifth paragraph.

NEW YORK ( TheStreet) -- Yahoo! (YHOO) shares dropped 3.36% to $23.00 after the Internet giant posted earnings that beat Wall Street expectations, but revenue continued to move in the wrong direction and guidance fell short of estimates.

Yahoo! reported first-quarter non-GAAP earnings of 38 cents per share on $1.14 billion in revenue, excluding traffic acquisition costs. Including TAC, sales were $1.07 billion. The company excluded stock-based compensation of $45 million in its earnings results for the first time.

The company noted display revenue ex-TAC was $402 million for the first quarter of 2013, down 11% year-over-year. Search revenue also declined year-over-year, coming in at $425 million, down from $470 million in the first quarter of 2012.

Analysts polled by Thomson Reuters expected Yahoo! to earn 24 cents per share on $1.099 billion in revenue for the first quarter. The consensus estimate from Estimize called for 26 cents per share on $1.11 billion in revenue.

"I'm pleased with Yahoo!'s performance in the first quarter. We saw continued stability in our business, strengthened our team, and started the year with fast execution against our products and partnerships," said Yahoo! CEO Marissa Mayer. "We are moving quickly to roll out beautifully designed, more intuitive experiences for our users. I'm confident that the improvements we're making to our products will set up the Company for long-term growth."

On the conference call, Mayer asserted that Yahoo! is best positioned in the industry because it is able to partner with other heavyweights such as Apple (AAPL), Google (GOOG), Facebook (FB) and Microsoft (MSFT). "Partnerships is a huge differentiator for Yahoo!," Mayer said on the call. "We want to put our users first and make their daily routines truly delightful." She later added that she had nothing new to add to the company's existing partnership deals, but noted that Yahoo! is constantly working to explore new possibilities.

The company ended the quarter with $5.4 billion in cash, down from $6 billion at the end of 2012. During the quarter, Yahoo! repurchased 38 million shares for $775 million.

Second-quarter guidance for Yahoo! missed estimates. Excluding TAC, revenue is expected to be between $1.06 billion and $1.09 billion, with non-GAAP operating income between $190 million and $210 million. Analysts polled by Thomson Reuters are looking for $1.12 billion in sales.

Shares of Yahoo! closed the regular session lower, falling 0.75% to finish at $23.80. The stock is down sharply in extended-hours trading, down 4.58% to $22.70 according to Nasdaq.com.

-- Written by Chris Ciaccia in New York

>Contact by Email.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,055.87 -116.81 -0.68%
S&P 500 1,982.77 -11.52 -0.58%
NASDAQ 4,508.6880 -19.0010 -0.42%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs