Yahoo may have averted a proxy battle with Carl Icahn, but the Netco still has its work cut out for itself if it is going to turn around its fading fortunes.
The company said Tuesday that its second quarter profit fell 18%to $131.2 million amid numerous corporate distractions related to its failed nuptials with Microsoft. Netco spent the first part of the period keeping Microsoft at arm’s length, and the remainder defending its actions, while also trying to jumpstart takeover talks. An outsourcing deal with Google did little to quell the second guessing or exec exodus. Icahn had been mounting a proxy fight against the current board until the two sides called a truce on Monday.
Yahoo’s results fell short of Wall Street expectations, but they weren’t as bad as some investors feared after Google, a much stronger search rival, failed to meet expectations in its earnings report last week. Yahoo revenue totaled $1.8 billion, up 6% from $1.7 billion at the same time last year.
During a call to analysts, topper Jerry Yang put a positive face on the results, calling the company’s progress promising. He expressed relief that the proxy fight had been averted under a settlement that granted Icahn three seats on the board.
Netco kept its revenue outlook for the remainder of the year relatively unchanged. However, Yang acknowledged that the soft economy dented ad buys from consumer product companies and financial services outfits.
Latest results will likely increase pressure on the Yahoo board as the Aug. 1 shareholder meeting approaches.
Yahoo shares rose 2.52% to $21.97 in after-hours trading.
(The Associated Press contributed to this report.)