Shares of Internet portal Yahoo, Inc. (Nasdaq: YHOO) fell more than 4 percent on Wednesday after the internet search giant posted a lower quarterly profit and gave a weaker-than expected forecast for the full fiscal year.
Fierce competition from rivals and slow display ad growth contributed to a 2 percent drop in quarterly profit. Net earnings were $161 million, or 11 cents a share, down from $164 million, or 11 cents a share, a year ago. It was the sixth consecutive quarterly profit drop for the company.
Yahoo also reported revenue rose 11 percent to $1.24 billion from $1.12 billion a year ago, excluding traffic acquisition costs.
The results matched Wall Street estimates as the Internet and media company warned in June that its numbers would come in towards the lower end of its forecasts.
Shares of Yahoo fell $1.13, or 4.1 percent to $27.53 in extended trading on the Nasdaq Stock Market.
Yahoo replaced Chief Executive Terry Semel with co-founder Jerry Yang a month ago and named Sue Decker, former chief financial officer and head of its advertising business, as president.
Yang told analysts in a conference call following the report that he intended to bring about change.
I intend to spend the next 100 days or so focused on mapping out a strategic plan, Yang said. I may not have all the answers, as of today, but I have a pretty strong idea of where I want to go.
Yahoo forecast revenue excluding payments to advertising affiliates of $1.17 billion to $1.31 billion for the third quarter and $4.89 billion to $5.19 billion for the full year.
It had previously expected such revenue to total $4.95 billion to $5.45 billion for the year.
Yahoo's share of U.S. Internet queries dropped to 21.5 percent in May from 22.9 percent a year earlier. Rival Google Inc. jumped to 56.3 percent from 49.1 percent, according to New York-based Nielsen//NetRatings, however.
Of the $21.7 billion US advertisers will spend online in 2007, Google is projected to account for 27.4 percent of that total - or $5.9 billion in net US revenues, according to eMarketer. But while Google has ascended, Yahoo!'s stake is slipping to 16.3 percent, down from a 19.4 percent market share in 2005.
By contrast, Google is expected to post double-digit gains in profit and sales when it reports second-quarter results on Thursday, as the Internet search company continues to maintain its substantial lead in online search.