were trading higher on Tuesday after the company reiterated guidance for the first quarter and the year, while saying it expects to double operating cash flow over the next three years.
Yahoo! says its cash flow will increase to $3.7 billion from $1.9 billion by 2010. At the same time, it plans to generate $8.8 billion in revenue, excluding traffic acquisition costs, two years from now.
Shares of Yahoo! were up 4.8%, or $1.25, to $27.10 in morning trading.
The company detailed the three-year financial plan in an investor presentation filed with the
Securities and Exchange Commission
. The plan had first been revealed to the board of directors in December, almost two months before
made an unsolicited bid to take control of the Internet giant.
Yahoo! pointed to the targets as evidence that Microsoft's offer of $44.6 billion substantially undervalued the company.
"With industry-leading tools, technology, people and platforms, Yahoo! is poised to capture growth in display advertising where we believe growth will be greatest," said CEO Jerry Yang in a statement. "Combined with our recent progress in search monetization, Yahoo! is well positioned to provide the broadest range of products to our advertisers, while delivering the most compelling experiences to users."
Analysts have been speculating that Yahoo! might be holding out for Microsoft to bump up its original offer of $31 a share.
Jeffrey Lindsay, an analyst for Sanford Bernstein, said he is not expecting much from the company. "Although management has the fig-leaf of claiming distraction by Microsoft, we think Yahoo! is likely to report another mediocre quarter," he said in a recent research report.
For the current quarter, Yahoo! affirmed its revenue guidance of between $1.28 billion and $1.38 billion. As for the full year, Yahoo! is still expecting a top line of $5.35 billion to $5.95 billion. Analysts had estimated revenue of $1.32 billion for the quarter and $5.65 billion for the year. Yahoo! expects to post its first-quarter earnings on April 22.
Yahoo! said it's continuing to evaluate strategic alternatives to the Microsoft bid, which so far have proven fruitless. The company has reportedly been in talks with
AOL division, but has failed to nail down a deal with any of them.
The company has already stretched its deadline to nominate directors to its board in an attempt to stall a Microsoft takeover. The original deadline had been set for March 14 and Microsoft was believed to be coming up with its own slate of candidates who would be in favor of its bid. But Yahoo! has extended that time to 10 days after it announces a date for its annual shareholder meeting.
Under the laws of Delaware, where the company is incorporated, the meeting must occur no later than July 12, or 13 months after its last one.
Yahoo! also outlined the sources of its projected growth over the next three years, including $1.4 billion in revenue from search and $1.9 billion in revenue excluding traffic acquisition costs from display and video advertising. It expects its own growth to outpace the currently anticipated market rate of expansion in online display and video advertising.
However, Yahoo! also faces a formidable challenger in those categories, namely Google, which recently acquired online ad-services firm DoubleClick in an effort to boost its display ads.