On Tuesday, Yahoo (YHOO) posted quarterly earnings that beat Wall Street forecasts, but YHOO stock fell more than 5% in Wednesday pre-market trading as investors contemplated the Internet pioneer’s falling ad sales.
YHOO stock sank after the company said that sales revenue fell 6% from the year-ago period to $1.3 billion. Adjusted sales revenue fell just 2% compared to the same time last year, which matched analysts’ estimates. Yahoo posted adjusted quarterly earnings of $330 million. EPS came in a 46 cents, topping the profit of 38 cents per share of YHOO stock that Wall Street had expected, CNN notes.
During the fourth quarter, Yahoo said search ad sales declined by 4% and sales of banner and video ads dropped 6%. The lower sales came despite increased visits to Yahoo websites last year. Lower ad sales suggest that efforts to turnaround Yahoo’s declining core business have yet to bear fruit.
YHOO stock closed at $38.22 a share on Tuesday. YHOO stock has gained more than 80% over the past twelve months.