NEW YORK (AP) – Yahoo Inc. said Tuesday that its second-quarter earnings and revenue declined, as the company struggled again with display advertising sales.
Both fell short of Wall Street’s expectations, as did revenue forecast for the current quarter, causing the limping Internet icon’s stock to fall in extended trading.
Before the forecast was revealed during a conference call with analysts, Yahoo’s stock rose as the company announced that Alibaba Group agreed to reduce the number of shares Yahoo is required to sell in the Chinese e-commerce company in an initial public offering of stock this year. Yahoo, which holds a 23 percent stake in Alibaba, now has to sell only 140 million shares in the IPO, down from 208 million earlier.
Although the reduction means that Yahoo’s immediate windfall from the Alibaba IPO will be smaller, it’s also a long-term bet on Alibaba’s success. Analysts say Alibaba’s IPO could be bigger than Facebook’s $16 billion stock debut two years ago, which would make Alibaba the biggest tech IPO ever.
Yahoo earned $270 million, or 26 cents per share, in the March-June quarter. That’s down from $331 million, or 30 cents per share, in the same period a year earlier. Adjusted earnings were 37 cents per share in the latest quarter.