Yahoo more than doubles its first-quarter profit

SAN FRANCISCO (AP) — Yahoo! Inc.'s first-quarter profit more than doubled, propelled by advertisers eager to have their products promoted on the Internet's most popular destination.

The company, based in Sunnyvale, Calif., said Wednesday it earned $101 million, 14 cents per share, compared with $46.7 million, 8 cents per share, at the same time last year.

Anticipating more good times ahead, Yahoo raised its financial projections for the rest of the year and announced plans to split its rapidly rising stock.

The first-quarter results topped the mean estimate of 11 cents per share among analysts polled by Thomson First Call.

Revenue for the three months ended in March reached $758 million, up from $283 million last year.

Yahoo generated much of the revenue gain from its recent $1.8 billion acquisition of Overture Services, which makes money distributing advertising links based on requests entered into online search engines.

Overture shares some of its revenue when the requests are made through search engines besides Yahoo's. If that cost had been subtracted, Yahoo said this year's first-quarter revenue would have been $550 million.

But by almost any measure, the first quarter accelerated the financial momentum Yahoo has been building since late 2002.

"Our impressive performance shows our company has really hit its stride," Yahoo Chairman Terry Semel bragged to analysts during a conference call Wednesday. Semel, a former movie studio boss, lifted Yahoo out of the dot-com doldrums after the company hired him nearly three years ago.

Now, Yahoo is making more money in a quarter than it did in any year of the dot-com mania. Before the crash, Yahoo posted a $71 million profit in 2000.

The recent earnings spurt has turned Yahoo's stock into a hot commodity again, tripling the company's market value since the end of 2002, although the shares still remain far below their 2000 peak of $237.50.

Yahoo's shares fell 42 cents Wednesday to close at $48.35 on the Nasdaq Stock Market before the earnings were released.

Encouraged by its recent success, Yahoo announced a two-for-one stock split, effective May 11.

Management also brightened its outlook, projecting 2004 revenue of $2.4 billion to $2.5 billion, excluding the money that Overture pays other Web sites. The mean analyst estimate had been $2.24 billion, according to Thomson First Call.