SAN FRANCISCO - Yahoo’s first-quarter profit met analyst expectations Tuesday, relieving investors who feared losses in the Internet powerhouse’s search engine market share might hinder its advertising growth.
Yahoo shares surged more than 6 percent on the news.
The Sunnyvale, Calif.-based company said it earned $159.6 million, or 11 cents per share, during the first three months of the year. That represented a 22 percent decrease from net income of $204.6 million, or 14 cents per share, at the same time a year ago.
It wasn’t an apples-toapples comparison because of new rules requiring companies to recognize the costs of their employee stock options.
The change, imposed over strident protests from Silicon Valley, is taking an especially large bite from the profits of Yahoo and other high-tech companies that have distributed bushels of stock options to reward their workers.
Yahoo said the accounting change lowered its earnings by $71 million in this year’s first quarter versus $6 million a year ago.
If not for the stock option expenses and other one-time gains, Yahoo said its profit for the just-ended quarter would have improved by 18 percent over the same period last year.
Analysts polled by Thomson Financial had factored the new accounting rules into their average estimate of 11 cents per share.
Revenue for the period totaled $1.57 billion, a 34 percent increase from last year. After subtracting the commissions paid to its advertising partners, Yahoo’s revenue totaled $1.09 million, about $10 million above analyst estimates.
The company released the results after the stock market closed. Yahoo shares gained 33 cents to finish at $31.30 on the Nasdaq Stock Market, then added $1.92, or 6.1 percent, in extended trading.
Yahoo’s robust revenue growth led many investors to conclude online search engine leader Google Inc. will turn in strong numbers when it releases its firstquarter results Thursday. Google’s shares decreased $2.58 to close at $404.24 on the Nasdaq, then rose $11.56, or 2.9 percent, in extended trading.