SAN FRANCISCO (Reuters) - Yahoo Inc posted quarterly results that beat Wall Street forecasts and gave a more optimistic view for the rest of the year, driving up its shares 10 percent on Tuesday.
Net profit was slightly lower than in the year-earlier third quarter but revenue far exceeded Wall Street expectations.
Yahoo said third-quarter net profit fell slightly to $151 million, or 11 cents per share, from $158.5 million, or 11 cents per share, in the year-ago period when the company had significantly more shares outstanding.
Gross revenue rose 12 percent to $1.77 billion. Excluding payments to advertising partners, or so-called traffic acquisition costs, revenue rose 14 percent to $1.28 billion.
Analysts had braced for lower profits, with a consensus forecast for net profit of $113.8 million, or 8 cents per share, according to Reuters Estimates. They had expected revenue, excluding traffic acquisition costs, of $1.24 billion.
Wall Street has been calling on Yahoo to consider more drastic moves for its businesses after a string of earnings disappointments stretching back to early 2006.
The company said in July it would conduct a 100-day review of its businesses, and many analysts and investors were looking to the company’s conference call later on Tuesday for details.
Yahoo also said full-year 2007 results were expected to land at the upper end of current Wall Street expectations, with revenue, excluding payments to affiliates, of $5.02 billion to $5.16 billion.
The latest Wall Street forecasts ranged from $4.90 billion to $5.18 billion, excluding payments to affiliates, according to Reuters Estimates.
Shares of Yahoo closed down 4.2 percent at $26.69 on Nasdaq but jumped more than 10 percent following the report to $29.44 in after-hours trading.
As of Tuesday’s closing price, Yahoo shares were 20 percent ahead of 2-1/2 year lows set in August as Wall Street is betting on bold moves by Chief Executive Jerry Yang to shake up its strategy and close in on rival Google Inc.
Some recommendations have included exiting Web search and hiring Google to handle it, cutting as much as 25 percent of its work force or even selling the company to the likes of Microsoft Corp or eBay Inc.
Reporting by Eric Auchard and Michele Gershberg