Troubled Internet company Yahoo reported a decline in fourth-quarter revenue after the market closed Tuesday, causing shares to plunge in after-hours trading.
The company desperately needed to show Wall Street it could grow revenue, especially after Google reported stellar Q4 earnings last Thursday. Yahoo didn't even come close.
(Also see: Yahoo sneaks in some more layoffs ahead of earnings) Shares (NASDAQ: YHOO) plunged to as low as 15.38, or 4 percent, after hours from Tuesday's closing price of 16.02. Don't expect things to get any better when the market opens Wednesday.
While Yahoo reported a gain in Q4 net income to $312 million, or 24 cents a share, from $153 million, or 11 cents a share, in the fourth quarter of 2009, net revenue fell 4 percent to $1.205 billion from $1.26 billion in the year-ago quarter. Total revenue -- excluding revenue it shares with Microsoft as part of a search agreement -- was $1.525 billion, down 12 percent from Q4 '09 revenue of $1.73 billion.
Consensus estimates called for earnings of 23 cents a share on net revenue of $1.19 billion. For once, investors ignored the fact that a company exceeded street expectations.
The company did report a 14 percent gain in online display ad revenue to $635 million from $560 million, but the overall picture was grim compared to the strong revenue growth reported by Google just a few days ago.
That Google announced Tuesday that it would hire an additional 6,000 workers as Yahoo was making its second round of layoffs in two months pretty much sums up the respective directions in which each company is headed.
The disappointing revenue results are sure to increase calls for the dismissal of CEO Carol Bartz, who has failed to craft a successful revenue turnaround strategy since taking the helm two years ago.
In a statement accompanying the earnings report, Bartz said, "We just completed a very encouraging quarter and year for Yahoo!, where we saw our plans to turn around the company gain momentum."
Sure, if you define "momentum" as turning in the lowest gross revenue of any quarter in the past two years.
The excitement on Wall Street is palpable.
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.
This story, "Yahoo's Q4 Net Revenue Down 4%, Shares Plunge After Hours" was originally published by ITworld.