Yahoo! Boosts Guidance, Sees Strong Growth

But the Net media outfit is mum on prospects for a long-hoped-for rebound in advertising spending.

Author:: George Mannes
Publish date:: Apr 10, 2002 6:52 PM EDT

Updated from 5 p.m. EDT

Yahoo!

(YHOO)

on Wednesday exceeded Wall Street's first-quarter revenue estimates and boosted its top-line targets, saying it expects "strong, profitable growth" for 2002.

After the market closed Wednesday, the Internet firm said that revenue for the quarter ended March 31 totaled $192.7 million, up from $180.2 million in the first quarter of 2001. The

mean forecast of analysts surveyed by Thomson Financial/First Call had been for revenue of $174.8 million, with the highest number coming in at $191.9 million. Not all of the analysts had included in their estimates revenues from the job site HotJobs, the acquisition of which Yahoo! closed in mid-February.

Earnings came in at the 2 cents per share figure analysts expected, up from a penny in the corresponding quarter of 2001.

In a postclose conference call, the company spoke optimistically about its speedy integration of the HotJobs unit. Yahoo! said it expects HotJobs to be ebitda-positive in the second half after a roughly breakeven first half. The company didn't offer broader guidance about the still flagging market for Internet advertising, however.

Including a noncash charge of $64.1 million for writedown of goodwill as per FASB 142, the company reported a net loss of $53.6 million, or 9 cents per share, compared to 2001's loss of $11.5 million, or two cents per share.

In normal trading, Yahoo!'s stock dropped 2 cents to close at $18.44. Shares dropped an additional 42 cents in after hours trading.

Excluding the month and a half of HotJobs revenue in the first quarter, revenue was "essentially flat" with the corresponding 2001 quarter, according to Yahoo! chief financial officer Sue Decker.

The company forecast second-quarter revenue of between $205 million and $225 million, with roughly $20 million to $25 million of that figure coming from HotJobs. For the year, the company raised its revenue estimate to a range of $870 million to $910 million. That includes $90 million to $100 million in revenue from HotJobs and $20 million to $30 million from a previously announced alliance with telco

SBC Communications

(SBC)

. Notably, the company says it's not assuming any improvement in Internet advertising, which contributed 63% of Yahoo!'s first quarter revenue.

Earnings before interest, taxes, depreciation, amortization and stock compensation expense is expected to be between $23 million and $33 million for the second quarter 2002 and between $105 million and $130 million for the full year 2002.

Analysts had forecast revenue of $192 million for the second quarter and $798 million for the year, but again it appeared many analysts had failed to factor in the HotJobs deal.

"Our first-quarter results show momentum and progress toward our goal to maximize long-term free cash flow," the company said in a press release. "This quarter also demonstrated the growing success of our monetization strategy, to draw increased value from our enormous consumer base and find new ways to drive financial value."

Despite repeated questions from analysts, the company declined to indicate whether it was extending its affiliation with pay-per-click search engine operator

Overture Services

(OVER)

beyond its current second quarter expiration date. In recent months, Overture's shares have swung in value based on news and rumors about its agreements with affiliates.