Yahoo Tops Estimates But Sales Slip 4 Percent

Yahoo delivered better-than-expected sales and earnings in its fourth quarter but announced another round of layoffs and offered up a diminished forecast for the first quarter.

As Datamation reports, Yahoo returned a profit of $312 million, or $0.24 a share, on sales of $1.2 billion.

Analysts pegged the Sunnyvale, Calif.-based firm for a profit of $0.22 a share on sales of $1.19 billion.

Ahead of the earnings report, Yahoo (NASDAQ: YHOO) announced its second round of layoffs in as many months, trimming between 100 and 150 employees– roughly 1 percent of its total headcount — in yet another cost-cutting move after pink-slipping 4 percent of its employees in December.

“We just completed a very encouraging quarter and made substantial strides while investing in our new products to turn Yahoo around,” CEO Carol Bartz told analysts during a conference call following the earnings release. “Our central focus is to increase profitability and revenue. To achieve these goals, we have to execute and that’s what we’ve done the past two years.”

Bartz pointed to the improved display advertising revenue, up 14 percent in the quarter, as a sign that Yahoo has regained its bearings, adding that Yahoo’s fourth-quarter ad sales growth was on par with its top competitors.

Total search revenue in the quarter, excluding traffic-acquisition costs (exTAC), fell 18 percent from the year-ago quarter to $388 million.

“Search is a very important area,” Bartz said. “Anytime you make changes, it takes time for the marketplace to adjust. 2011 will be the final year of major competitive headwinds.”

More concerning for Yahoo investors, the company said it now expecting first-quarter sales of between $1.02 billion and $1.08 billion, shy of the $1.13 billion most analysts were forecasting.

Read the full story at Datamation:

Yahoo Squeaks Past Estimates; Announces More Layoffs

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