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Wednesday, 10 January, 2001, 21:50 GMT
Yahoo warns of tough year ahead
Yahoo relies on online advertising
Internet portal Yahoo has warned that the year ahead could be tough, as it unveiled its fourth quarter earnings.

In the fourth quarter, Yahoo posted earnings per share of 13 cents, in line with market expectations, and higher than the nine cents per share they posted last year.

The company, which makes most of its revenues from selling online advertising, saw revenues of $311m for the quarter, compared with $203m the year before.

However, this good news was overshadowed by the fact that the company forecast that its earnings for the year ahead would be lower than analyst expectations - news that sent its shares sharply lower.

Advertising woes

Part of the problem for Yahoo is its reliance on online advertising. Many companies have scaled back on their marketing budget already and if the US economic slowdown continues, then companies are likely to be less ready to spend cash on advertising.

The company forecasts that earnings for the year ahead will be between 33 and 43 cents, a wide range indicating the uncertainty surrounding the immediate future.

Analysts had originally forecast that its earnings per share would be 57 cents.

The internet portal expects that its full-year sales will be $1.2 to $1.3bn, slightly lower than the $1.4bn expected by analysts.

Shares hit

Shares in Yahoo had ended 38 cents higher at $30.50, but in after-hours trading dropped almost $5 on the news.

Even though the company's stock is already about 80% lower than its high, some analysts fear it could fall even further.

Technology stocks had been rattled worldwide in anticipation of results from both Yahoo and Motorola.

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20 Oct 00 | Business
Yahoo asks investors for patience
05 Apr 00 | Business
Yahoo grows on
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