SAN FRANCISCO – Yahoo Inc. forecast fourth-quarter sales that trailed analysts’ estimates as the company struggles to attract advertising dollars under a turnaround effort by CEO Marissa Mayer.
Revenue, excluding sales passed to partner sites, will be $1.18 billion to $1.22 billion in the current quarter, Sunnyvale, Calif.-based Yahoo said Tuesday in a presentation. Analysts on average had been expecting revenue of $1.25 billion, according to data compiled by Bloomberg.
While sales continue to decline, thwarting Mayer’s attempts to compete with Google and Facebook, Yahoo is generating earnings from its stake of about 24 percent in Alibaba Group Holding, China’s largest e-commerce company. Yahoo said Tuesday that it reduced the maximum number of shares it is required to sell in Alibaba’s initial public offering by 20 percent to 208 million.
“As for the core business, there continues to be pressure,” said Benjamin Schachter, an analyst at Macquarie Securities USA in New York. With a greater Alibaba stake, “that means they can participate in the potential upside,” said Schachter, who has the equivalent of a hold rating on the stock.
Third-quarter profit, excluding some items, was 34 cents a share, beating analysts’ average estimate of 33 cents. Revenue of $1.08 billion was in line with estimates.