Net income was up for the quarter and the year, but an overall income slide proves worrisome for investors as Yahoo stock takes a hit.
Yahoo turned in a mixed fourth quarter of 2013 earnings report Jan. 28, banking $348.2 million in profit but no doubt looking for answers to a 6 percent drop in top-line revenue with $1.27 billion.
Net income was up substantially from the $272.3 million it reported in the fourth quarter a year ago, so things are looking up for the pioneering search and Web services company.
Fiscal year 2013 figures indicated revenues at $4.7 billion, which also was down 6 percent from the previous year. Net income on the year totaled $590 million, which was up 4 percent.
CEO Marissa Meyer, nearing the end of her second year in the job, has made a series of cost cuts during her time at the helm, trimming extraneous projects and staff, so much of the net income stems from those moves.
Quarterly income from display advertising was $491 million, down 6 percent from the year-ago period. Yearly display revenue totaled $1.74 billion, a 9 percent slide from 2012.
This is not good news for Yahoo investors, because advertising totals are up at most of Yahoo's competitors, which range from search engines (Google and Bing) to social networks (Facebook, Twitter, LinkedIn, Pinterest).
Yahoo's search engine revenues were more promising, totaling $461 million for the fourth quarter of 2013, up 8 percent from 2012's fourth quarter. Total 2013 search revenue $1.7 billion, a 6 percent jump over the previous year.
While the Sunnyvale, Calif.-based company's earnings exceeded analysts' projections and sales met forecasts, its stock took a hit in extended-hours trading, probably mostly due to guidance the company offered in its first-quarter outlook. After closing at $38.22, the price slipped to $37.29, down 2.4 percent, in after-hours trading.
Yahoo said it expects first quarter of 2014 net income of between $130 million and $170 million, well below most forecasts. The company also sees current-quarter sales of between $1.06 billion $1.1 billion; analysts' expectations have hovered around $1.08 billion.
On the conference call with analysts, Mayer said she was "encouraged by the quarter and the full year overall," pointing out the company's several new acquisitions, redesigned Websites and apps. She also pointed out an increase in visitor traffic as a sign that the improvements are working.