$2 bil in cash to be used to weather slowdown, exec sez
Yahoo! is in search of a new CEO as Tim Koogle said Wednesday that he will ankle the post as soon as a replacement can be found.
Move comes as the Internet portal giant is preparing to announce a 25% drop in its first-quarter earnings, due to lower advertising spending amid economic uncertainty.
In a statement, the company said that its first-quarter earnings will likely hover around $180 million rather than the $232 million Wall Street analysts had expected.
Pro-forma earning before interest, taxes, depreciation and amortization, as well as net income, will be approximately break-even, Yahoo! said.
Trading of Yahoo! stock was halted soon after Wednesday’s opening bell. It last traded at $21, down $1.38 on Wednesday, nearly 90% off of its 52-week high of $205.63.
During a conference call, Koogle cited a balance sheet with about $2 billion in cash and no debt, saying, “We will use these assets to weather the … slowdown.”
The company said its transition from relying upon advertising revenues from pure Internet companies to traditional businesses was not as quick as it had hoped, as these companies have halted or pulled back their marketing accounts.
“All businesses in the United States are facing challenging economic conditions that have weakened further in recent weeks, and as consumer confidence and spending has deteriorated, a broad range of customers have delayed their spending across all media formats until their economic outlook improves,” Koogle said in a statement.
While Yahoo! had predicted $1.2 billion in revenues in 2001, those numbers are looking to be out of reach as is the validity to any rumors that Yahoo! will be buying a media giant such as Disney. Yahoo!’s first-quarter earnings will be announced in April.
Yahoo! has hired Spencer Stuart & Associates to conduct an external search for a CEO.
Koogle, who started his stint as chief exec before the company went public, will retain his title as chairman.
Yahoo! said it may buy back up to $500 million of its outstanding common stock over the next two years. It had 565 million shares of outstanding stock as of March 1.