Yahoo! Reports Third Quarter 2001 Financial Results - Financial Reports - Brief Article

Information Superhighways Newsletter, Oct, 2001

Yahoo! Inc. reported net revenues totaling $166.1 million for the third quarter ended September 30,2001, compared to net revenues of $295.5 million for the third quarter ended September 30, 2000. Pro forma net income for the quarter ended September 30,2001 was $8.4 million or $0.01 per share diluted. This compares to pro forma net income of $81.1 million or $0.13 per share diluted for the comparable period in the previous year. The actual net loss for the third quarter ended September 30,2001, which includes net investment losses of $17.9 million, was $24.1 million or $0.04 per share diluted, compared to actual net income of $47.7 million or $0.08 per share diluted reported in the comparable period of the previous year.

During the quarter, Yahoo!'s strong consumer metrics underscored the company's leadership position among online consumers. Yahoo!'s global network continues to be number one, worldwide, in terms of unique users, reach, and time spent (Nielsen//NetRatings, August 2001). Yahoo!'s global audience grew to 210 million unique users, compared to 166 million in September 2000. In addition, a record 80 million active registered members logged onto Yahoo! during September 2001. The company's traffic increased to a record 1.25 billion page-views per day, on average, during September 2001.

"In the five months since I joined Yahoo!, we have been building upon Yahoo!'s already solid foundation and we are continuing on our path of evolutionary change. We remain focused on opportunities that will strengthen our leadership position, provide essential services to our users and partners, and drive profitable growth," said Terry Semel, Yahoo!'s chairman and CEO. "While we find ourselves in an unprecedented environment of economic uncertainty, the recent tragic events in the United States have proven that the Internet is a highly valuable global communications and information delivery medium. Although there is limited visibility into the future, Yahoo! intends to manage through this period and emerge from it an even stronger leader."

"Yahoo!'s global audience of active, loyal consumers continues to grow, strengthening our position as the leading Internet destination and the partner of choice for marketers and businesses," said Jeff Mallett, Yahoo!'s president and chief operating officer. "We will continue to leverage Yahoo!'s powerful global franchise to maximize the growth opportunities in our key businesses of marketing services, business and enterprise services and consumer services."

As part of Yahoo!'s commitment to attract and retain experienced industry leaders, the company recently announced three key new additions to the senior management team. Yahoo! appointed Wenda Harris Millard as chief advertising sales officer, responsible for driving the North American sales of the company's advertising and marketing services initiatives and leading the North American sales organization. James A. Fanella was named senior vice president of business and enterprise services, and is leading the development and business strategies for Yahoo!'s services that target enterprise customers, including Corporate Yahoo! and Yahoo! Broadcast Services. Lastly, Yahoo! named Elizabeth Sartain as senior vice president of human resources, overseeing the company's global human resources efforts.

"The top-notch leaders we have recently hired solidify our experienced senior-level management team and positions Yahoo! for future growth," added Semel. "These seasoned professionals will continue to enhance the quality of both our advertising and business services sales organizations and sustain our increased focus on providing clients with essential solutions to suit their varied needs."

Discussing the corporation's business outlook, Susan Decker, Yahoo!'s chief financial officer, declared that, "Through fiscal discipline, Yahoo! delivered on revenue and profitability projections in the third quarter while managing through a challenging economic environment. We remain focused on building strong customer relationships which facilitate a higher quality revenue mix in addition to identifying and investing in areas that will drive long-term, profitable growth."

Based on current information, the company expects revenues for the fourth quarter 2001 to be between $160 and $180 million, thereby implying a range of $688 to $708 million for the full year 2001. By business segment, the company expects revenues from business and premium services to represent approximately 20% of total revenue in the fourth quarter and approaching 20% for the full year 2001, with marketing services and commerce accounting for the remainder.

In the fourth quarter 2001, Yahoo! expects pro forma earnings before interest, depreciation and amortization (EBITDA) to range from a $5 million loss to a $10 million profit and pro forma earnings per share (EPS) to be approximately breakeven to $0.01. For the full year 2001, pro forma EBITDA is expected to be between $10 million to $25 million and pro forma EPS in the range of $0.04 to $0.06.