Yahoo! (YHOO): Bad, And A Lot Of People Let Go

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The market took Yahoo! shares down 6% in the regular session ahead of earnings. For the third quarter, analysts expected Yahoo to post earnings of $.88  on $1.37 billion in net revenue, according to consensus estimates from FactSet Research. That compares with earnings of $.11 and net revenue of $1.28 billion in the same period last year.

As it turned out, revenue excluding traffic acquisition costs was $1,325 million for the third quarter of 2008, a 3 percent increase compared with $1,283 million for the same period of 2007. Net income was $54 million, or $.04 per share, compared with $151 million, or $.11 per share, for the same period of 2007.

Yahoo! said it goal is to reduce its current annualized cost run rate of approximately $3.9 billion by more than $400 million before the end of 2008. The firm expects to reduce its global workforce by at least 10 percent during the fourth quarter of 2008.

For the last quarter of the year, Yahoo! expects revenue to be $1,773 million to $1.973 and for the full year $7.175 million to $7.375 million.

The figures were weak, but a relief based on what the market had feared the numbers would be.

Shares rallied 7% after hours to $12.90.

Douglas A. McIntyre