Yahoo announced its third quarter earnings today, with with both revenue and revenue costs down due to a search agreement Yahoo made with Microsoft. The company tallied $1.217 million in GAAP revenue, down 24 percent year over year.
Yahoo recently fired its chief executive officer, Carol Bartz, and though it was not reflected in this quarter’s earnings, the rocky road that Yahoo has faced is evident. The company is trying to bounce back, however, by beefing up its product offerings, including its recent Facebook app that allows Facebook users to access Yahoo content directly from withing the social network.
“We have a better product planning process in cycle,” said interim chief executive Tim Morse.
Here are some highlights from the call:
- Revenue excluding traffic acquisition costs was $1,072 million, down 5 percent from the third quarter in 2010, which tapped out at $1,124 million.
- GAAP Revenue was $1,217 million, down 24 percent from $1,601 million in Q3 of 2010.
- Income from operations was $177 million, down six percent from $189 million in the same quarter last year.
- Net earnings were $293 million, down 26 percent from $396 million in Q3 2010.
- Net earnings per diluted share were .23 cents, down 21 percent from .29 cents in Q3 2010.
In Yahoo’s search agreement with Microsoft, the company will be reimbursed the same operating costs Yahoo incurs under the alliance. This quarter’s earnings reflect a $4 million reimbursement from Microsoft. The total costs on Yahoo’s end were more $150 million, exceeding the cap on reimbursements set by the deal.