Updated from April 7Yahoo! ( YHOO) gave its growing legion of fans lots to cheer about Wednesday afternoon. Kicking off the pivotal first-quarter earnings season for the Internet sector, the Sunnyvale, Calif., media giant posted stronger-than-expected numbers. It also laid plans for a 2-for-1 stock split and boosted 2004 guidance. The news sent the stock surging 10% in wild postclose action, and the party continued Thursday morning. The shares were recently up $6.30, or 13%, to $54.65 on the Instinet premarket session. Although analysts have been saying that Yahoo! is benefiting from the postbubble recovery of the Internet advertising market, they clearly underestimated the extent to which Yahoo! has been cleaning up. "Everything that we have achieved is the result of a very deliberate and focused strategy," CEO Terry Semel said on the company's Wednesday conference call. Semel said that the organic growth rate of the company's marketing-services revenue could approach 35% this year, up from the company's prior forecast in the range of 25% to 30% growth. Thus, he said, the company is "gaining share in an industry which is also gaining traction." Ahead of the news on Wednesday, Yahoo! fell 42 cents to $48.35, leaving it just shy of its 52-week high. CSFB raised its price target to $65 from $57 Thursday morning, while Goldman upped its target to $60 from $55.
For its first quarter ended March 31, Yahoo! posted earnings of $101 million, or 14 cents a share, on net revenue of $550 million. That's up from the year-ago $47 million, or 8 cents a share, on revenue of $283 million. A penny of the latest quarter's EPS figure comes from a one-time gain on unredeemed third-party loyalty program points that expired during the quarter. Analysts had expected a first-quarter profit of 11 cents a share on net revenue just north of $500 million. Net revenue excludes traffic acquisition costs the company's Overture Services unit pays other Web sites. Operating income before depreciation and amortization amounted to $211 million, comfortably ahead of the $161 million consensus.