Yahoo! storms! Q4!

2003 is looking good

Dot-com survivor Yahoo! said this week that it beat expectations for the fourth quarter, as it raised estimates for 2003.

For the last three months of 2002, the Internet giant said that revenue jumped 51 per cent from the same time a year ago, reaching $285.8m, at the high end of its previously stated guidance. This figure was also comfortably ahead of the $278.6m estimate that analysts on Wall Street were calling for. Omitting sales from HotJobs, which was purchased by Yahoo in early 2002, revenues jumped a whopping 39 per cent year-on-year.

The company said that fourth quarter earnings amounted to $46.2m, or $0.08 per share, compared to a year-ago $0.02 loss. Analysts had forecast a $0.06 profit, which Yahoo came in well ahead of.

"Over the last twelve months we have executed against a business plan which has taken Yahoo from a company with tremendous potential to one with multiple strong businesses, from which we believe we can continue to build a sustainable long-term future," said Terry Semel, chairman and chief executive officer of Yahoo. "We experienced growth in both our existing businesses and newer areas."

The company said that its all-important advertising revenue, which amounted to 62 per cent of sales, grew mainly through Yahoo's sponsored search business. Semel also said that traditional advertising sales grew, on a sequential basis, in every quarter in 2002.

Fees and listings, which account for about 32 per cent of Yahoo's revenue, skyrocketed by 65 per cent, thanks mainly to the HotJobs acquisition and more paying customers for the company's existing services in the category. Such services include Yahoo Personals and the ISP service that the company sells in conjunction with SBC Communications.

Importantly, the company said that it would raise its guidance for 2003, with revenues expected to come in at between $1.145bn to $1.215bn. Previously the company predicted revenues of $1.075bn to $1.175bn. Earnings before interest, taxes, depreciation and amortisation (EBDITA) were increased from a range of $250m to $300m to a range of $295m to $330m.

"As we move into 2003, we continue to focus on maximising long-term free cash flow per share," said Susan Decker, chief financial officer of Yahoo! "Our long-term financial strategy of attracting significantly more revenue from our growing user base without commensurately increasing our expense appears to be gaining traction. In 2003, we expect strong growth in revenue, profitability and free cash flow, even as we continue to invest in areas that we expect will drive long-term growth."

Yahoo stock fell by $0.80 on Wednesday, before results were released. Over the last four months, however, the value of Yahoo shares has doubled to $18.78.

© ENN

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