Yahoo's revenue grew slightly in the first quarter of 2010 but profits rose more strongly, as the company's display advertising business performed to management's satisfaction.
Yahoo had revenue of US$1.59 billion in the first quarter of 2010, ended March 31, up 1 percent compared with the first quarter of 2009, the company said Tuesday. Subtracting commissions and other fees paid to partners, revenue was $1.13 billion, below the $1.17 billion consensus expectation from analysts polled by Thomson Financial.
Net income came in at $310 million, or $0.22 per share, up from $118 million, or $0.08 per share. In the first quarter of 2010, Yahoo got a $0.05-per-share benefit from the sale of Zimbra and a $0.02-per-share benefit from reimbursements made by Microsoft related to the companies' search deal.
On a pro forma basis, which excludes certain items, net income was $218.84 million, or $0.15 per share, six cents more than analysts expected and up from $123.11 million, or $0.09 per share, one year ago.
In a statement, Yahoo CEO Carol Bartz called the quarter "good" and highlighted a 20 percent revenue growth in display advertising, including a 24 percent increase in "guaranteed" display ad revenue, which are pricier ad units for which marketers pay a premium.
Yahoo ended the quarter with free cash flow of $64 million, down 70 percent from 2009's first quarter, and with cash, cash equivalents, and investments in marketable debt securities of $4.24 billion, down $274 million from 2009's fourth quarter.
Yahoo expects revenue in the second quarter of 2010 to be between $1.60 billion and $1.68 billion.