Yahoo Inc. on Tuesday posted a higher fourth-quarter profit, beating estimates as online advertising won more business away from television and Yahoo’s Web search service grew.
Yahoo shares rose 1.7 percent in after-market trading, as the Internet bellwether also said its first-quarter and 2005 revenue will come in at the high end of analysts' estimates.
Sunnyvale, California-based Yahoo’s profit rose to $373 million, or 25 cents a share, on the sale of some of its shares in Google Inc. Excluding that gain, its net profit was $187 million, or 13 cents per share, up from $75 million, or 5 cents, last year.
Revenue, excluding fees Yahoo pays to its advertising partners, rose to $785 million from $511 million a year earlier.
Yahoo and other Internet names such as Google have been benefiting from growth in online advertising as mainstream advertising dollars follow audiences from television to the Web.
Analysts, on average, had forecast a revenue of $755.7 million. Earnings excluding the investment sale were seen at 11 cents, according to Reuters Estimates.
“Yahoo continues to manage the business well,” said ThinkEquity analyst John Tinker, noting the breadth of Yahoo’s business and its continued international growth.
“There was nice upside on the top line. It looks like very strong organic growth,” said American Technology Research analyst Mark Mahaney, who said the company’s forecasts came in ahead of expectations.
To that end, Yahoo forecast revenue, excluding fees it pays to advertisers, of $765 million to $805 million in the first quarter. For the full year, it said revenues would be $3.37 billion to $3.57 billion.
Analysts’ current consensus estimates call for comparable revenues of $766.6 million in the first quarter and $3.37 billion for 2005.
Ad forecasters expect online advertising spending to rise 25 percent in 2005. Internet media company Yahoo Inc. on Tuesday posted a jump in quarterly profit fueled by online advertising revenue and the sale of an investment.
Sunnyvale, California-based Yahoo saw its profit rise to $373 million, or 25 cents a share, on the sale of an investment. Excluding that gain its net profit was $187 million, or 13 cents per share, up from $75 million, or 5 cents, last year.
Revenue, excluding fees Yahoo pays to its advertising partners, rose to $785 million from $511 million a year earlier.
