Yahoo! Profit Beats Estimates; Company Names a New CFO

Updated from 5:04 p.m. EDT

Yahoo!(YHOO), the leading Internet portal, reported Wednesday that its earnings more than tripled in the first quarter, exceeding Wall Street's forecasts by a penny, powered by stronger-than-expected revenues from electronic commerce and advertising.

Yahoo! also named a new chief financial officer, tapping Susan Decker, the global head of research at Donaldson, Lufkin & Jenrette. She will succeed Gary Valenzuela, 43, the current chief financial officer, who will retire in July.

Yahoo! said that excluding one-time items, it earned $63.3 million, or 10 cents a diluted share, in the quarter, compared with $17.7 million, or 3 cents a share, in the year-earlier period. Analysts surveyed by First Call/Thompson Financial had projected earnings of 9 cents a share.

The news that the Santa Clara, Calif.-based company exceeded expectations isn't all that surprising: Yahoo! has beaten analysts projections in each of the last 15 quarters. In a note issued last week, Henry Blodget, the Merrill Lynch Internet analyst, said he would not be surprised to see Yahoo! post earnings of 10 to 11 cents a share.

The company reported revenues of $228.4 million, a 120% increase over $103.9 million in the year-earlier quarter. Analysts expected revenue of $204 million, according to First Call.

Yahoo!'s earnings numbers became the subject of heightened attention in the last two days because of the turmoil in the technology-heavy Nasdaq following the collapse from the Microsoft(MSFT) settlement talks and a federal judge's ruling on Monday that the company had violated antitrust laws.

"Yahoo!'s earnings are going to be examined with more scrutiny than they would be," said Alex George, a trader at the New York firm Miller Tabak.

"I'm hoping that based on this news, we will see strength return to at least the blue chips of the Internet group," said Patrick Winton, analyst with E*Offering. "I think that Yahoo! delivered as expected." Winton rates the stock a strong buy and his firm has not done any underwriting for the company.

Yahoo! shares were down slightly ahead of the earnings announcement, which came after the markets closed, falling 1 15/16, or 1%, to 165 9/16 in Wednesday trading. Yahoo! fell in after hours trading to 162, according to Instinet.

Yahoo!, one of the few Internet companies that is profitable, also reported a big increase in page views for the quarter, posting 625 million average daily page views in March, compared with 465 million average page views a day in December. The March number was well ahead of expectations, and it marked the company's strongest sequential performance in a year.

Yahoo! also said that it is increasing its long-term target operating margin rate from 36% to 38%. "Yahoo! already had a very attractive operating margin," Winton said. What is most significant about the increase is that the company expects to maintain a healthy margin while continuing its aggressive expansion plans, particularly abroad, Winton said.

Michael Brick, a reporter for TheStreet.com/NYTimes.com joint newsroom, contributed to this report.

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