SAN FRANCISCO (Reuters) - Yahoo Inc said it would cut 5 percent of its global workforce, after reporting a quarterly profit that met Wall Street expectations thanks to cost cuts that offset declining revenues.
The Internet company said it would also continue to implement unspecified "non-headcount cost reductions," so that it can increase its ability to make strategic investments and target hiring in its core operations.
"It's crucial that management adjusts the cost structure to the new growth (or lack thereof) realities; so margin protection is paramount to Yahoo right now," Youssef Squali, analyst at Jefferies & Co, said in an email. "We think there is potential outperformance on margins," he added.
Shares of Yahoo rose 1.7 percent in after-hours trading to $14.63.
Yahoo said last October that it would cut about one-tenth of its workforce, or about 1,500 jobs. The company finished 2008 with roughly 13,600 employees, and said it would take severance charges from the new round of layoffs during the second quarter
In the first full quarter under the leadership of Chief Executive Carol Bartz, Yahoo generated revenue of $1.58 billion, down 13 percent from the year-ago period.
Excluding traffic acquisition costs (TAC), Yahoo's revenue was $1.16 billion, compared with the average analyst expectation of $1.2 billion, according to Reuters Estimates.
The Sunnyvale, California-based company reported a net profit in the first quarter of $118 million, or 8 cents a share -- down from $537 million, or 37 cents a share, a year earlier. Wall Street analysts, on average, had forecast earnings at 8 cents a share, according to Reuters Estimates.
Chief Financial Officer Blake Jorgensen told Reuters there were "still very dark clouds on the horizon" for the economy.
"I'll try to resist calling the bottom in any way," he said in a phone interview.
Yahoo projected that sales in the current quarter will range between $1.425 billion and $1.625 billion.
(Reporting by Alexei Oreskovic and Anupreeta Das; Writing by Tiffany Wu; Editing by Gary Hill)
