Yahoo projected that income from operations in the current quarter will range between $55 million to $65 million, down from $76 million in the second quarter.
Yahoo said revenue in the second quarter decreased 13 percent year-over-year to $1.57 billion. Excluding traffic acquisition costs -- the portion of revenue that is shared with Yahoo partners -- Yahoo had net revenue of $1.14 billion, in line with the average of analysts' expectations, according to Reuters Estimates.
Yahoo posted net income of $141 million, or 10 cents a share compared with net income of $131.2 million, or 9 cents a share, at this time last year. Analysts, on average, were looking for EPS of 8 cents a share.
Yahoo projected sales of $1.45 billion to $1.55 billion for the current quarter.
Shares of Yahoo fell 67 cents, or 4.7 percent, to $16.08 in after-hours trade on Tuesday.
(Reporting by Alexei Oreskovic; Editing by Gary Hill)