(Associated Press via NewsEdge) Yahoo's fourth-quarter profit topped analysts' expectations to end a recent pattern of financial letdowns, a breakthrough that the Internet bellwether hopes to build upon by accelerating the introduction of long-awaited improvements to the advertising system that fuels its growth.
The pleasant surprise lifted Yahoo's stock price by more than 5% after management shared the news.
The Sunnyvale-based company said it earned $268.7 million, or $0.19 per share, during the final three months of 2006, traditionally the peak season for Web sites like Yahoo that depend on advertising for most of their revenue.
The profit declined 61% from net income of $683.2 million at the same time in 2005, but the two quarters didn't provide an apples-to-apples comparison. That's because a one-time gain of $310 million boosted the 2005 results while the 2006 figures included stock option expenses that weren't recorded on Yahoo's books in the previous year.
More importantly for investors, Yahoo chairman Terry Semel announced in a conference call that the company will move up the US debut of a new formula that will determine which ads are most likely to get clicked upon and sales commissions.
Yahoo now plans to roll out the upgrade, code-named Project Panama, during the first week of February, about two months ahead of a revised timetable that management outlined October.
That news helped boost Yahoo's stock price by $1.49, or 5.5%.
The company originally hoped to introduce Panama late last year, but decided to delay the high-stakes project to give its engineers more time to work out the kinks.
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