Yahoo! reports fail to wow Wall Street

Netco shares closed at $33.40

The seemingly golden Terry Semel has taken his first blow atop Yahoo!: Netco saw its stock plunge 11% Wednesday after reporting second quarter earnings that fell squarely within its guidance but disappointed investors used to company continually beating predictions.

It was the first earnings report for Yahoo! in over a year that failed to wow the Street.

Revenue for the quarter was $1.25 billion, up 51% from the same quarter a year ago. Net income excluding a one-time sale was $192 million, up 69%. Revenue excluding the costs Netco pays to distribution partners was $875 million, right in the middle of company’s $855 million-$895 million guidance.

Because Yahoo! has consistently beat expectations for the past several quarters, analysts seem to have considered that de rigeur.

With its first solid but unspectacular quarter in a while, though, Wall Street panicked at a sign that online media may no longer be on the explosive growth curve it has enjoyed for the past couple of years.

As a result, stock in competitor Google opened $4 below its Tuesday close, though they ended up slightly higher thanks to a boost from strong earnings at eBay late in the day.

In the current quarter, Yahoo! is predicting revenue excluding costs to acquire traffic from distribution partners of $880 million-$930 million and operating income before depreciation and amortization costs of $350 million-$380 million, about even with last quarter’s $368 million.

Yahoo! shares closed at $33.40 Wednesday.

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