Posted by: Rob Hof on January 29, 2008
It’s never a good thing when one of the quotes of the CEO in an earnings report mentions “headwinds.” That Yahoo, which just reported fourth-quarter earnings, faces a lot of challenges shouldn’t be news to investors, but those investors don’t look too happy. Yahoo’s stock is down
7% 8% 10% in after-hours trading. That follows yesterday’s 5% drop and today’s rise of a few pennies.
The results didn’t look so bad, maybe a hair light on revenues compared with expectations but I believe better-than-expected net profits of 15 cents a share. The problem apparently is the outlook for 2008, which comes in at the low end of analysts’ expectations.
More to come after the earnings call, when I’m sure people will ask where the missing layoffs went.
Yang on the call: He talks about a “strategic workforce realignment” (yeesh), so the layoffs are on. He doesn’t yet say how many, but they’ll be by mid-February. Not across the board but in targeted areas (probably lots in Europe from what I hear).
He’s also talking a lot about making aggressive investments this year, which will no doubt translate to pressure on profits.
He finally chose a Chief Technology Officer, too, Ari Balogh from Verisign.
CFO Blake Jorgensen finally lets loose the number of layoffs: 1,000, or 7% of the workforce of 14,300. Not much more than what I had heard recently, much less than the 2,500 some folks had even recently expected. Cold comfort to the folks on the way out, but everyone knew they were coming given profit pressure and the acquisitions last year that surely created administrative overlap. Yahoo will take a $20 million to $25 million charge for them.