New Yahoo CEO says company needs to "do better"
California: Yahoo Chief Executive Scott Thompson tried to manage expectations on his first earnings call as the new CEO, broadly addressing numerous issues the Internet company is grappling with -- from a potential sale to reviving its core display advertising business -- but declined to lay out a detailed strategy.
Analysts prodded Thompson for clues about his plans for Yahoo Inc (YHOO.O), which fired former CEO Carol Bartz in September and last week saw co-founder Jerry Yang resign unexpectedly, but all they received were boilerplate comments about how the company needs to "do better" and "get innovative products that matter into the market."
"He seemed to be speaking with a greater sense of urgency to act than his predecessors have," said Stifel Nicolaus analyst Jordan Rohan. But Rohan noted that it was too early to expect Thompson to have a specific gameplan to share with investors.
Thompson, along with Chief Financial Officer Tim Morse, gave few hints about the progress of Yahoo`s strategic review as well, dashing hopes that his arrival might hasten a transaction.
Morse said talks with Yahoo`s Asian partners -- Alibaba and Softbank -- about a restructuring were continuing but beyond that provided little concrete detail on where things stand.
Thompson, who was only hired as CEO two weeks ago, added that the company`s board has narrowed down its options to the ones that appear "most promising."
Meanwhile, Yahoo`s net revenue and profit fell slightly in the fourth quarter, as it experienced year-over-year declines in both its search and display ad business.
"Their core display (business) is becoming an issue. It takes the company from being a growth company to being a melting ice cube. So it`s a big deal," said Brett Harris, an analyst at Gabelli & Company.
Shares of the company slipped 4 cents to $15.65 in after-hours trade.
Morse said that macroeconomic factors, particularly in Europe, resulted in weaker than expected display advertising revenue in the fourth quarter and continued to be a concern.
"We still look out, especially upon Europe, with some caution," Morse told Reuters in an interview on Tuesday.
But he said Yahoo was seeing some positive trends in the new year, noting that some large advertisers that had limited their ad spending with Yahoo in 2011, had already committed to "meaningful upfronts" in 2012.
The struggling Internet company projected that its net revenue in the first quarter would range between $1.025 billion and $1.105 billion.
The company earned $296 million in net income in the three months ended December 31, or 24 cents a share, compared with $312 million, or 24 cents a share, in the year-ago period.
Analysts polled by Thomson Reuters I/B/E/S were expecting 24 cents per share in profit.
In the fourth quarter, Yahoo reported net revenue, which excludes fees that Yahoo shares with Web partners, of roughly $1.17 billion, compared with $1.205 billion the same time last year.
Display ad revenue, Yahoo`s main source of revenue, totaled $612 million for the quarter. Search ad revenue for the quarter came in at $465 million, $48 million of which stemmed from its partnership with Microsoft.
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