Yahoo Inc shares have sagged on a lower-than-expected earnings and forecast, and its decision to push back the release of new search technology.
Shares in the company fell 13.6% to $27.85 in after-hours trading on the Nasdaq following the news.
On a conference call, Yahoo announced it would delay new search technology that was expected to help it better compete against search leader Google Inc. Yahoo’s search technology is now expected to debut in the fourth quarter, and not the third as previously planned.
The company posted a $164m, or 11 cents a share, profit, compared to $754.7 million, or 51 cents per share, a year ago.
In the year-ago quarter, Yahoo enjoyed an investment gain of $552m related to the sales of shares in Google. Also, for its most current quarter, ending June 30, Yahoo accounted for $73m in stock-base compensation, or $7m more than last year.
Sunnyvale, California-based Yahoo earned $1.12bn in revenue, up 28% from $875m last year. In part, this was thanks to a 9% rise in traffic to Yahoo sites, compared to last year’s quarter. Still, revenue fell short of Wall Street analysts’ $1.14bn target.
Yahoo’s forecast for the current quarter also disappointed. The company said it expects revenue to be between $1.12bn and $1.23bn, missing analysts’ target range of between $1.15bn and $1.24bn.